##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period Ended September 30, 2009
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Transition Period From _________ To _________
 Commission File Number: 000-30421
 HANMI FINANCIAL CORPORATION
 (Exact Name of Registrant as Specified in its Charter)
 Delaware
    
    
    
    95-4788120(State or Other Jurisdiction of Incorporation or Organization)
    
    
    
    (I.R.S. Employer Identification No.)3660 Wilshire Boulevard, Penthouse Suite A 
Los Angeles, California
    
    
    
    90010(Address of Principal Executive Offices)
    
    
    
    (Zip Code)
 (213) 382-2200  (Registrants Telephone Number, Including Area Code)
 Not Applicable  (Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report)
 þ o
 o o
  Large Accelerated Filer o
    
    Accelerated Filer þ
    
    Non-Accelerated Filer o
(Do Not Check if a Smaller Reporting Company)
    
    Smaller Reporting Company o
 o þ




---



##### 



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  QUARTERLY REPORT ON FORM 10-Q  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTSConsolidated Balance Sheets (Unaudited)
    
    1Consolidated Statements of Operations (Unaudited)
    
    2Consolidated Statements of Changes in Stockholders Equity and Comprehensive Loss
(Unaudited)
    
    3Consolidated Statements of Cash Flows (Unaudited)
    
    4Notes to Consolidated Financial Statements (Unaudited)
    
    5ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
    
    29ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    60ITEM 4. CONTROLS AND PROCEDURES
    
    61PART II  OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGS
    
    61ITEM 1A. RISK FACTORS
    
    62ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    65ITEM 3. DEFAULTS UPON SENIOR SECURITIES
    
    65ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    65ITEM 5. OTHER INFORMATION
    
    65ITEM 6. EXHIBITS
    
    66SIGNATURES
    
    68EX-31.1EX-31.2EX-32.1EX-32.2




---



##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 (In Thousands; Except Share Data)
 September 30,
    
    
    December 31,2009
    
    
    2008ASSETSCash and Due from Banks
    
    $
    57,727
    
    
    $
    83,933Interest-Bearing Deposits in Other Banks
    
    
    155,607
    
    
    
    2,014Federal Funds Sold
    
    
    
    
    
    
    130,000Cash and Cash Equivalents
    
    
    213,334
    
    
    
    215,947Investment Securities Held to Maturity, at Amortized Cost (Fair Value of $876 as of September 30,
2009 and $910 as of December 31, 2008)
    
    
    876
    
    
    
    910Investment Securities Available for Sale, at Fair Value (Amortized Cost of $200,633 as of
September 30, 2009 and $195,077 as of December 31, 2008)
    
    
    205,025
    
    
    
    196,207Loans Receivable, Net of Allowance for Loan Losses of $124,768 as of September 30, 2009 and
$70,986 as of December 31, 2008
    
    
    2,847,618
    
    
    
    3,253,715Loans Held for Sale, at the Lower of Cost or Fair Value
    
    
    5,118
    
    
    
    37,410Due from Customers on Acceptances
    
    
    1,859
    
    
    
    4,295Premises and Equipment, Net
    
    
    19,302
    
    
    
    20,279Accrued Interest Receivable
    
    
    11,389
    
    
    
    12,347Other Real Estate Owned, Net
    
    
    27,140
    
    
    
    823Deferred Income Taxes, Net
    
    
    2,464
    
    
    
    29,456Servicing Assets
    
    
    3,957
    
    
    
    3,791Other Intangible Assets, Net
    
    
    3,736
    
    
    
    4,950Investment in Federal Home Loan Bank Stock, at Cost
    
    
    30,697
    
    
    
    30,697Investment in Federal Reserve Bank Stock, at Cost
    
    
    10,053
    
    
    
    10,228Income Taxes Receivable
    
    
    34,908
    
    
    
    11,712Bank-Owned Life Insurance
    
    
    26,171
    
    
    
    25,476Other Assets
    
    
    13,843
    
    
    
    17,573TOTAL ASSETS
    
    $
    3,457,490
    
    
    $
    3,875,816LIABILITIES AND STOCKHOLDERS EQUITYLIABILITIES:Deposits:Noninterest-Bearing
    
    $
    561,548
    
    
    $
    536,944Interest-Bearing
    
    
    2,430,312
    
    
    
    2,533,136Total Deposits
    
    
    2,991,860
    
    
    
    3,070,080Accrued Interest Payable
    
    
    19,730
    
    
    
    18,539Bank Acceptances Outstanding
    
    
    1,859
    
    
    
    4,295Federal Home Loan Bank Advances
    
    
    160,828
    
    
    
    422,196Other Borrowings
    
    
    1,496
    
    
    
    787Junior Subordinated Debentures
    
    
    82,406
    
    
    
    82,406Accrued Expenses and Other Liabilities
    
    
    12,191
    
    
    
    13,598Total Liabilities
    
    
    3,270,370
    
    
    
    3,611,901COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS EQUITY:Common Stock, $0.001 Par Value; Authorized 200,000,000 Shares; 55,833,890 Shares Issued
(51,201,390 Shares Outstanding) as of September 30, 2009 and 50,538,049 Shares Issued
(45,905,549 Shares Outstanding) as of December 31, 2008
    
    
    56
    
    
    
    51Additional Paid-In Capital
    
    
    357,028
    
    
    
    349,304Unearned Compensation
    
    
    (361
    )
    
    
    (218
    )Accumulated Other Comprehensive Income  Unrealized Gain on Investment Securities
Available for Sale, Net of Income Taxes of $1,847 as of September 30, 2009 and $473 as of
December 31, 2008
    
    
    2,559
    
    
    
    544Retained Deficit
    
    
    (102,150
    )
    
    
    (15,754
    )Less Treasury Stock, at Cost; 4,632,500 Shares as of September 30, 2009 and December 31, 2008
    
    
    (70,012
    )
    
    
    (70,012
    )Total Stockholders Equity
    
    
    187,120
    
    
    
    263,915TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    3,457,490
    
    
    $
    3,875,816
  1




---



##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
 (Dollars in Thousands; Except Per Share Data)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008INTEREST AND DIVIDEND INCOME:Interest and Fees on Loans
    
    $
    42,705
    
    
    $
    56,134
    
    
    $
    132,508
    
    
    $
    172,637Taxable Interest on Investment Securities
    
    
    1,541
    
    
    
    2,049
    
    
    
    4,261
    
    
    
    7,743Tax-Exempt Interest on Investment Securities
    
    
    607
    
    
    
    650
    
    
    
    1,871
    
    
    
    2,071Interest on Term Federal Funds Sold
    
    
    293
    
    
    
    
    
    
    
    1,688
    
    
    
    Dividends on Federal Reserve Bank Stock
    
    
    150
    
    
    
    176
    
    
    
    456
    
    
    
    528Interest on Federal Funds Sold and Securities Purchased Under Resale Agreements
    
    
    67
    
    
    
    23
    
    
    
    261
    
    
    
    137Interest on Interest-Bearing Deposits in Other Banks
    
    
    68
    
    
    
    4
    
    
    
    81
    
    
    
    5Dividends on Federal Home Loan Bank Stock
    
    
    64
    
    
    
    405
    
    
    
    64
    
    
    
    953Total Interest and Dividend Income
    
    
    45,495
    
    
    
    59,441
    
    
    
    141,190
    
    
    
    184,074INTEREST EXPENSE:Interest on Deposits
    
    
    17,365
    
    
    
    19,365
    
    
    
    62,836
    
    
    
    64,699Interest on Federal Home Loan Bank Advances
    
    
    865
    
    
    
    3,324
    
    
    
    2,987
    
    
    
    11,406Interest on Junior Subordinated Debentures
    
    
    747
    
    
    
    1,150
    
    
    
    2,581
    
    
    
    3,763Interest on Other Borrowings
    
    
    
    
    
    
    5
    
    
    
    2
    
    
    
    344Total Interest Expense
    
    
    18,977
    
    
    
    23,844
    
    
    
    68,406
    
    
    
    80,212NET INTEREST INCOME BEFORE PROVISION FOR CREDIT LOSSES
    
    
    26,518
    
    
    
    35,597
    
    
    
    72,784
    
    
    
    103,862Provision for Credit Losses
    
    
    49,500
    
    
    
    13,176
    
    
    
    119,387
    
    
    
    50,226NET INTEREST INCOME (LOSS) AFTER PROVISION FOR CREDIT LOSSES
    
    
    (22,982
    )
    
    
    22,421
    
    
    
    (46,603
    )
    
    
    53,636NON-INTEREST INCOME:Service Charges on Deposit Accounts
    
    
    4,275
    
    
    
    4,648
    
    
    
    13,032
    
    
    
    13,904Insurance Commissions
    
    
    1,063
    
    
    
    1,194
    
    
    
    3,430
    
    
    
    3,893Remittance Fees
    
    
    511
    
    
    
    499
    
    
    
    1,579
    
    
    
    1,543Trade Finance Fees
    
    
    512
    
    
    
    784
    
    
    
    1,517
    
    
    
    2,474Other Service Charges and Fees
    
    
    489
    
    
    
    433
    
    
    
    1,439
    
    
    
    1,852Net Gain on Sales of Loans
    
    
    864
    
    
    
    
    
    
    
    866
    
    
    
    765Bank-Owned Life Insurance Income
    
    
    234
    
    
    
    241
    
    
    
    695
    
    
    
    715Gain on Sales of Investment Securities
    
    
    
    
    
    
    
    
    
    
    1,277
    
    
    
    618Loss on Sales of Investment Securities
    
    
    
    
    
    
    (483
    )
    
    
    (109
    )
    
    
    (483
    )Other-Than-Temporary Impairment Loss on Investment Securities
    
    
    
    
    
    
    (2,410
    )
    
    
    
    
    
    
    (2,410
    )Other Operating Income (Loss)
    
    
    265
    
    
    
    422
    
    
    
    (462
    )
    
    
    1,874Total Non-Interest Income
    
    
    8,213
    
    
    
    5,328
    
    
    
    23,264
    
    
    
    24,745NON-INTEREST EXPENSE:Salaries and Employee Benefits
    
    
    8,648
    
    
    
    10,782
    
    
    
    24,659
    
    
    
    33,363Occupancy and Equipment
    
    
    2,834
    
    
    
    2,786
    
    
    
    8,506
    
    
    
    8,360Deposit Insurance Premiums and Regulatory Assessments
    
    
    2,001
    
    
    
    780
    
    
    
    7,420
    
    
    
    2,098Other Real Estate Owned Expense
    
    
    3,372
    
    
    
    2
    
    
    
    5,017
    
    
    
    141Data Processing
    
    
    1,608
    
    
    
    1,498
    
    
    
    4,691
    
    
    
    4,730Professional Fees
    
    
    1,239
    
    
    
    647
    
    
    
    2,745
    
    
    
    2,627Supplies and Communication
    
    
    603
    
    
    
    681
    
    
    
    1,772
    
    
    
    2,008Advertising and Promotion
    
    
    447
    
    
    
    914
    
    
    
    1,640
    
    
    
    2,614Loan-Related Expense
    
    
    192
    
    
    
    170
    
    
    
    1,590
    
    
    
    569Amortization of Other Intangible Assets
    
    
    379
    
    
    
    478
    
    
    
    1,214
    
    
    
    1,504Other Operating Expenses
    
    
    2,366
    
    
    
    3,497
    
    
    
    7,383
    
    
    
    7,859Impairment Loss on Goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    107,393Total Non-Interest Expense
    
    
    23,689
    
    
    
    22,235
    
    
    
    66,637
    
    
    
    173,266INCOME (LOSS) BEFORE PROVISION (BENEFIT) FOR INCOME TAXES
    
    
    (38,458
    )
    
    
    5,514
    
    
    
    (89,976
    )
    
    
    (94,885
    )Provision (Benefit) for Income Taxes
    
    
    21,207
    
    
    
    1,166
    
    
    
    (3,580
    )
    
    
    3,393NET INCOME (LOSS)
    
    $
    (59,665
    )
    
    $
    4,348
    
    
    $
    (86,396
    )
    
    $
    (98,278
    )EARNINGS (LOSS) PER SHARE:Basic
    
    $
    (1.26
    )
    
    $
    0.09
    
    
    $
    (1.86
    )
    
    $
    (2.14
    )Diluted
    
    $
    (1.26
    )
    
    $
    0.09
    
    
    $
    (1.86
    )
    
    $
    (2.14
    )WEIGHTED-AVERAGE SHARES OUTSTANDING:Basic
    
    
    47,413,141
    
    
    
    45,881,549
    
    
    
    46,415,225
    
    
    
    45,869,069Diluted
    
    
    47,413,141
    
    
    
    45,933,043
    
    
    
    46,415,225
    
    
    
    45,869,069DIVIDENDS DECLARED PER SHARE
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    0.09
  2




---



##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY AND COMPREHENSIVE
LOSS (UNAUDITED)  (In Thousands; Except Share Data)
 Common Stock - Number of Shares
    
    

Stockholders EquityAccumulatedAdditional
    
    
    
    
    
    
    Other
    
    
    Retained
    
    
    Treasury
    
    
    TotalTreasury
    
    
    
    
    
    
    Common
    
    
    Paid-In
    
    
    Unearned
    
    
    Comprehensive
    
    
    Earnings
    
    
    Stock,
    
    
    StockholdersIssued
    
    
    Stock
    
    
    Outstanding
    
    
    Stock
    
    
    Capital
    
    
    Compensation
    
    
    Income (Loss)
    
    
    (Deficit)
    
    
    at Cost
    
    
    EquityBALANCE AS OF JANUARY 1, 2008
    
    
    50,493,441
    
    
    
    (4,632,500
    )
    
    
    45,860,941
    
    
    $
    50
    
    
    $
    348,073
    
    
    $
    (245
    )
    
    $
    275
    
    
    $
    92,415
    
    
    $
    (70,012
    )
    
    $
    370,556Cumulative-Effect Adjustment from the
Adoption of FASB ASC 715-60
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,223
    )
    
    
    
    
    
    
    (2,223
    )Shares Issued for Business Acquisitions
    
    
    39,608
    
    
    
    
    
    
    
    39,608
    
    
    
    1
    
    
    
    292
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    293Repurchase of Stock Options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (70
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (70
    )Share-Based Compensation Expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    752
    
    
    
    39
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    791Restricted Stock Awards
    
    
    10,000
    
    
    
    
    
    
    
    10,000
    
    
    
    
    
    
    
    67
    
    
    
    (67
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeiture of Restricted Stock Award
    
    
    (5,000
    )
    
    
    
    
    
    
    (5,000
    )
    
    
    
    
    
    
    (41
    )
    
    
    41
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cash Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,853
    )
    
    
    
    
    
    
    (3,853
    )Comprehensive Loss:Net Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (98,278
    )
    
    
    
    
    
    
    (98,278
    )Change in Unrealized Loss on
Investment Securities Available for Sale,
Net of Income Taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20
    )
    
    
    
    
    
    
    
    
    
    
    (20
    )Total Comprehensive Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (98,298
    )BALANCE AS OF SEPTEMBER 30, 2008
    
    
    50,538,049
    
    
    
    (4,632,500
    )
    
    
    45,905,549
    
    
    $
    51
    
    
    $
    349,073
    
    
    $
    (232
    )
    
    $
    255
    
    
    $
    (11,939
    )
    
    $
    (70,012
    )
    
    $
    267,196BALANCE AS OF JANUARY 1, 2009
    
    
    50,538,049
    
    
    
    (4,632,500
    )
    
    
    45,905,549
    
    
    $
    51
    
    
    $
    349,304
    
    
    $
    (218
    )
    
    $
    544
    
    
    $
    (15,754
    )
    
    $
    (70,012
    )
    
    $
    263,915Shares Issued in Private Offering, Net of
Offering and Underwriting Costs
    
    
    5,070,423
    
    
    
    
    
    
    
    5,070,423
    
    
    
    5
    
    
    
    6,834
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,839Shares Issued for Business Acquisitions
    
    
    39,418
    
    
    
    
    
    
    
    39,418
    
    
    
    
    
    
    
    46
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46Share-Based Compensation Expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    649
    
    
    
    52
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    701Restricted Stock Awards
    
    
    205,000
    
    
    
    
    
    
    
    205,000
    
    
    
    
    
    
    
    284
    
    
    
    (284
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeiture of Restricted Stock Awards
    
    
    (19,000
    )
    
    
    
    
    
    
    (19,000
    )
    
    
    
    
    
    
    (89
    )
    
    
    89
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive Loss:Net Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (86,396
    )
    
    
    
    
    
    
    (86,396
    )Change in Unrealized Gain on Investment
Securities Available for Sale, Net of
Income Taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,015
    
    
    
    
    
    
    
    
    
    
    
    2,015Total Comprehensive Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (84,381
    )BALANCE AS OF SEPTEMBER 30, 2009
    
    
    55,833,890
    
    
    
    (4,632,500
    )
    
    
    51,201,390
    
    
    $
    56
    
    
    $
    357,028
    
    
    $
    (361
    )
    
    $
    2,559
    
    
    $
    (102,150
    )
    
    $
    (70,012
    )
    
    $
    187,120
  3




---



##### Table of Contents



HANMI
FINANCIAL CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)  (In Thousands)
 Nine Months EndedSeptember 30,2009
    
    
    2008CASH FLOWS FROM OPERATING ACTIVITIES:Net Loss
    
    $
    (86,396
    )
    
    $
    (98,278
    )Adjustments to Reconcile Net Loss to Net Cash Provided By Operating Activities:Depreciation and Amortization of Premises and Equipment
    
    
    1,977
    
    
    
    2,202Amortization of Premiums and Accretion of Discounts on Investment Securities, Net
    
    
    (736
    )
    
    
    121Amortization of Other Intangible Assets
    
    
    1,214
    
    
    
    1,504Amortization of Servicing Assets
    
    
    597
    
    
    
    1,068Share-Based Compensation Expense
    
    
    701
    
    
    
    791Provision for Credit Losses
    
    
    119,387
    
    
    
    50,226Federal Home Loan Bank Stock Dividends
    
    
    
    
    
    
    (953
    )Net Gain on Sales of Investment Securities
    
    
    (1,168
    )
    
    
    (135
    )Other-Than-Temporary Loss on Investment Securities
    
    
    
    
    
    
    2,410Net Gain on Sales of Loans
    
    
    (866
    )
    
    
    (765
    )Loss on Sales of Other Real Estate Owned
    
    
    440
    
    
    
    132Provision for Valuation Allowance on Other Real Estate Owned
    
    
    2,501
    
    
    
    Impairment Loss on Goodwill
    
    
    
    
    
    
    107,393Deferred Tax
Expense (Benefit)
    
    
    38,150
    
    
    
    (212
    )Origination of Loans Held for Sale
    
    
    (1,221
    )
    
    
    (45,490
    )Net Proceeds from Sales of Loans Held for Sale
    
    
    34,379
    
    
    
    24,037Decrease in Accrued Interest Receivable
    
    
    958
    
    
    
    3,610Increase in Servicing Asset
    
    
    (763
    )
    
    
    (750
    )Increase in Cash Surrender Value of Bank-Owned Life Insurance
    
    
    (695
    )
    
    
    (714
    )(Increase) Decrease in Other Assets
    
    
    (1,894
    )
    
    
    7,706Increase in Income Taxes Receivable
    
    
    (29,976
    )
    
    
    (12,154
    )Increase (Decrease) in Accrued Interest Payable
    
    
    1,191
    
    
    
    (10,484
    )Decrease in Other Liabilities
    
    
    (1,681
    )
    
    
    (6,058
    )Net Cash Provided By Operating Activities
    
    
    76,099
    
    
    
    25,207CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from Redemption of Federal Home Loan Bank and Federal Reserve Bank Stock
    
    
    175
    
    
    
    2,536Proceeds from Matured or Called Investment Securities Available for Sale
    
    
    47,290
    
    
    
    124,950Proceeds from Sales of Investment Securities Available for Sale
    
    
    38,448
    
    
    
    26,001Proceeds from Sales of Other Real Estate Owned
    
    
    4,068
    
    
    
    155Net Decrease (Increase) in Loans Receivable
    
    
    253,704
    
    
    
    (68,459
    )Purchases of Federal Home Loan Bank Stock
    
    
    
    
    
    
    (10,261
    )Purchases of Investment Securities Available for Sale
    
    
    (89,357
    )
    
    
    (25,336
    )Purchases of Premises and Equipment
    
    
    (1,000
    )
    
    
    (2,114
    )Net Cash Provided By Investing Activities
    
    
    253,328
    
    
    
    47,472CASH FLOWS FROM FINANCING ACTIVITIES:Decrease in Deposits
    
    
    (78,220
    )
    
    
    (202,322
    )Net Proceeds from Issuance of Common Stock in Private Offering
    
    
    6,839
    
    
    
    Cash Paid to Repurchase Stock Options
    
    
    
    
    
    
    (70
    )Cash Dividends Paid
    
    
    
    
    
    
    (3,853
    )Proceeds from Long-Term Federal Home Loan Bank Advances
    
    
    
    
    
    
    250,000Repayment of Long-Term Federal Home Loan Bank Advances
    
    
    (107,139
    )
    
    
    (349
    )Net Change in Short-Term Federal Home Loan Bank Advances and Other Borrowings
    
    
    (153,520
    )
    
    
    (151,843
    )Net Cash Used In Financing Activities
    
    
    (332,040
    )
    
    
    (108,437
    )NET DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (2,613
    )
    
    
    (35,758
    )Cash and Cash Equivalents at Beginning of Period
    
    
    215,947
    
    
    
    122,398CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    213,334
    
    
    $
    86,640SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash Paid During the Period for:Interest Paid
    
    $
    67,215
    
    
    $
    90,696Income Taxes Paid
    
    $
    
    
    
    $
    13,873Non-Cash Activities:Stock Issued for Business Acquisition
    
    $
    46
    
    
    $
    293Transfer of Loans to Other Real Estate Owned
    
    $
    38,326
    
    
    $
    2,988Loan Provided in the Sale of Other Real Estate Owned
    
    $
    5,000
    
    
    $
    Transfer of Equity Securities from Other Assets to Securities Available for Sale
    
    $
    
    
    
    $
    511
  4




---



##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 NOTE 1  BASIS OF PRESENTATION
    Note 1  Summary of
Significant Accounting Policies
   NOTE 2  LIQUIDITY
 Risks and Uncertainties,
 5




---



##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Continued)
 NOTE 2  LIQUIDITY (Continued)
 Hanmi Financial
  Hanmi Bank
   6




---



##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Continued)
 NOTE 2  LIQUIDITY (Continued)
    Note 13  Subsequent Events
 7




---



##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Continued)
 NOTE 3  REGULATORY MATTERS
 Risk-Based Capital
    Minimum
    
    
    Minimum to BeRegulatory
    
    
    Categorized asActual
    
    
    Requirement
    
    

Well
CapitalizedAmount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio(Dollars in Thousands)September 30, 2009Total Capital (to Risk-Weighted Assets):Hanmi Financial
    
    $
    281,845
    
    
    
    9.15
    %
    
    $
    246,403
    
    
    
    8.00
    %
    
    
    N/A
    
    
    
    N/AHanmi Bank
    
    $
    297,942
    
    
    
    9.69
    %
    
    $
    246,071
    
    
    
    8.00
    %
    
    $
    307,589
    
    
    
    10.00
    %Tier 1 Capital (to Risk-Weighted Assets):Hanmi Financial
    
    $
    241,951
    
    
    
    7.86
    %
    
    $
    123,202
    
    
    
    4.00
    %
    
    
    N/A
    
    
    
    N/AHanmi Bank
    
    $
    258,262
    
    
    
    8.40
    %
    
    $
    123,035
    
    
    
    4.00
    %
    
    $
    184,553
    
    
    
    6.00
    %Tier 1 Capital (to Average Assets):Hanmi Financial
    
    $
    241,951
    
    
    
    6.60
    %
    
    $
    146,608
    
    
    
    4.00
    %
    
    
    N/A
    
    
    
    N/AHanmi Bank
    
    $
    258,262
    
    
    
    7.05
    %
    
    $
    146,444
    
    
    
    4.00
    %
    
    $
    183,055
    
    
    
    5.00
    %December 31, 2008Total Capital (to Risk-Weighted Assets):Hanmi Financial
    
    $
    383,043
    
    
    
    10.79
    %
    
    $
    283,943
    
    
    
    8.00
    %
    
    
    N/A
    
    
    
    N/AHanmi Bank
    
    $
    379,438
    
    
    
    10.70
    %
    
    $
    283,561
    
    
    
    8.00
    %
    
    $
    354,451
    
    
    
    10.00
    %Tier 1 Capital (to Risk-Weighted Assets):Hanmi Financial
    
    $
    338,042
    
    
    
    9.52
    %
    
    $
    141,972
    
    
    
    4.00
    %
    
    
    N/A
    
    
    
    N/AHanmi Bank
    
    $
    334,628
    
    
    
    9.44
    %
    
    $
    141,781
    
    
    
    4.00
    %
    
    $
    212,671
    
    
    
    6.00
    %Tier 1 Capital (to Average Assets):Hanmi Financial
    
    $
    338,042
    
    
    
    8.93
    %
    
    $
    151,371
    
    
    
    4.00
    %
    
    
    N/A
    
    
    
    N/AHanmi Bank
    
    $
    334,628
    
    
    
    8.85
    %
    
    $
    151,168
    
    
    
    4.00
    %
    
    $
    188,959
    
    
    
    5.00
    %
  8




---



##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Continued)
 NOTE 3  REGULATORY MATTERS (Continued)
 Memorandum of Understanding
 Note 13  Subsequent Events
  Note 13  Subsequent
Events
   
    
    In the first quarter of 2008, the historical loss rate migration analysis was enhanced.
Twelve previous quarters loss history, with the most recent six quarters weighted more
heavily at 1.5 to 1.0 to factor in the increased loss rate to reflect the changing economic
environment. Previously, the analysis was conducted using the previous 28 quarters all
weighted evenly. The revision is more realistic and dynamic, which is particularly
pertinent during these fast-changing times.
    
    The reserve factors for contingent liabilities have also been enhanced and now are based
on the actual loan pool usage percentages and the risk rating reserve percentages, whereas
before only the weighted historical loss rates for clean loans were used.
    
    Furthermore, collateral values are fluctuating more widely this past year than in
previous years. Therefore, real estate secured loans are being monitored more frequently,
and collateral is being reappraised more frequently so that impairment on these loans,
whether they are classified loans or pass loans, may be calculated accurately for purposes
of the allowance for loan losses.
 9




---



##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Continued)
 NOTE 3  REGULATORY MATTERS (Continued)
 
    
    The impairment policy has also been revised to require charge-off of fully impaired
loans within 90 days of the impairment date. Exceptions to this policy are allowed only
with the Chief Credit Officers approval.
    
    The memorandum of understanding addresses enhancement of loan policies and procedures.
The revisions to the loan policies and procedures were made more in response to changes in
the business environment and increased credit risk, rather than to a specific mandate in
the Memorandum of Understanding.
   
    
    The Board of Directors membership has been changed.
Since October 2008, seven directors
have retired or resigned. The Board has successfully recruited and elected four new
directors, each of them with prior banking experience, professional designations and a
wealth of knowledge and experience.
    
    The Corporate Governance Guidelines have also been revised and enhanced to more clearly
outline director qualifications, nomination procedures and succession planning.
    
    The memorandum of understanding also called for enhancements to the Capital Augmentation
and Maintenance Plan, the Liquidity Contingency Plan, the Strategic Plan and the Earnings
Plan. These have been completed and the plans are being followed with positive results.
   10




---



##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Continued)
 NOTE 3  REGULATORY MATTERS (Continued)
  Capital Plan
  NOTE 4  FAIR VALUE MEASUREMENTS
 Fair Value Option and Fair Value Measurements
 Fair Value Measurements and Disclosures,
 Financial Instruments, Note 5  Investment Securities.
 11




---



##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Continued)
 NOTE 4  FAIR VALUE MEASUREMENTS (Continued)
  Investment Securities Available for Sale
 Loans Held for Sale
 Impaired Loans Receivables,
 Other Real Estate Owned
 Servicing Assets and Servicing Liabilities
 Other Intangible Assets
 12




---



##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Continued)
 NOTE 4  FAIR VALUE MEASUREMENTS (Continued)
 Investments  Debt and Equity Securities,
 Fair Value Measurement
  Level 1
    
    Quoted prices (unadjusted) for identical assets or liabilities in active
markets that the entity has the ability to access as of the measurement date.Level 2
    
    Significant other observable inputs other than Level 1 prices, such as quoted
prices for similar assets or liabilities, quoted prices in markets that are not active, and
other inputs that are observable or can be corroborated by observable market data.Leve1
3
    
    Significant unobservable inputs that reflect a companys own assumptions about
the assumptions that market participants would use in pricing an asset or liability.
 13




---



##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Continued)
 NOTE 4  FAIR VALUE MEASUREMENTS (Continued)
 Assets and Liabilities Measured at Fair Value on a Recurring Basis
  Level
1
    
    

Level
2
    
    

Level
3SignificantObservableQuoted Prices in
    
    
    Inputs With NoActive Markets
    
    
    Active Market
    
    
    Significant
    
    
    Balance as offor Identical
    
    
    With Identical
    
    
    Unobservable
    
    
    September 30,Assets
    
    
    Characteristics
    
    
    Inputs
    
    
    2009(In Thousands)ASSETS:Investment Securities Available for Sale:Mortgage-Backed Securities
    
    $
    
    
    
    $
    80,089
    
    
    $
    
    
    
    $
    80,089Municipal Bonds
    
    
    
    
    
    
    57,437
    
    
    
    
    
    
    
    57,437U.S. Government Agency Securities
    
    
    38,022
    
    
    
    
    
    
    
    
    
    
    
    38,022Collateralized Mortgage Obligations
    
    
    
    
    
    
    15,576
    
    
    
    
    
    
    
    15,576Asset-Backed Securities
    
    
    
    
    
    
    8,417
    
    
    
    
    
    
    
    8,417Other Securities
    
    
    
    
    
    
    2,971
    
    
    
    1,201
    
    
    
    4,172Equity Securities
    
    
    873
    
    
    
    
    
    
    
    
    
    
    
    873Corporate Bond
    
    
    439
    
    
    
    
    
    
    
    
    
    
    
    439Total Investment Securities Available for Sale
    
    $
    39,334
    
    
    $
    164,490
    
    
    $
    1,201
    
    
    $
    205,025Servicing Assets
    
    $
    
    
    
    $
    
    
    
    $
    3,957
    
    
    $
    3,957LIABILITIES:Servicing Liabilities
    
    $
    
    
    
    $
    
    
    
    $
    (225
    )
    
    $
    (225
    )
  Fair Value Measurements Using Significant Unobservable Inputs (Level 3)Realized andUnrealizedBeginning
    
    
    
    
    
    
    Realized and
    
    
    Gains (Losses)
    
    
    
    
    
    
    EndingBalance as of
    
    
    Purchases,
    
    
    Unrealized
    
    
    in Other
    
    
    Transfers
    
    
    Balance as ofJuly 1,
    
    
    Issuances and
    
    
    Gains (Losses)
    
    
    Comprehensive
    
    
    In and/or Out
    
    
    September 30,2009
    
    
    Settlements
    
    
    in Earnings
    
    
    Income
    
    
    of Level 3
    
    
    2009(In Thousands)ASSETS:Investment Securities Available
for Sale  Other Securities
    
    $
    1,571
    
    
    $
    
    
    
    $
    
    
    
    $
    (370
    )
    
    $
    
    
    
    $
    1,201Servicing Assets
    
    $
    3,444
    
    
    $
    689
    
    
    $
    (176
    )
    
    $
    
    
    
    $
    
    
    
    $
    3,957LIABILITIES:Servicing Liabilities
    
    $
    (222
    )
    
    $
    
    
    
    $
    (3
    )
    
    $
    
    
    
    $
    
    
    
    $
    (225
    )
 14




---



##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Continued)
 NOTE 4  FAIR VALUE MEASUREMENTS (Continued)
  Fair Value Measurements Using Significant Unobservable Inputs (Level 3)Realized andUnrealizedBeginning
    
    
    
    
    
    
    Realized and
    
    
    Gains (Losses)
    
    
    
    
    
    
    EndingBalance as of
    
    
    Purchases,
    
    
    Unrealized
    
    
    in Other
    
    
    Transfers
    
    
    Balance as ofJanuary 1,
    
    
    Issuances and
    
    
    Gains (Losses)
    
    
    Comprehensive
    
    
    In and/or Out
    
    
    September 30,2009
    
    
    Settlements
    
    
    in Earnings
    
    
    Income
    
    
    of Level 3
    
    
    2009(In Thousands)ASSETS:Investment Securities Available
for Sale  Other Securities
    
    $
    1,311
    
    
    $
    
    
    
    $
    
    
    
    $
    (110
    )
    
    $
    
    
    
    $
    1,201Servicing Assets
    
    $
    3,791
    
    
    $
    763
    
    
    $
    (597
    )
    
    $
    
    
    
    $
    
    
    
    $
    3,957LIABILITIES:Servicing Liabilities
    
    $
    (238
    )
    
    $
    
    
    
    $
    13
    
    
    $
    
    
    
    $
    
    
    
    $
    (225
    )
 Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
  Level 1
    
    
    Level 2
    
    
    Level 3SignificantObservableQuoted Prices in
    
    
    Inputs With NoActive Markets
    
    
    Active Market
    
    
    Significant
    
    
    Balance as offor Identical
    
    
    With Identical
    
    
    Unobservable
    
    
    September 30,
    
    
    TotalAssets
    
    
    Characteristics
    
    
    Inputs
    
    
    2009
    
    
    Gains (Losses)(In Thousands)ASSETS:Loans Held for Sale
    
    $
    
    
    
    $
    5,118
    
    
    $
    
    
    
    $
    5,118
    
    
    $
    Impaired Loans
    
    $
    
    
    
    $
    111,038
    
    
    $
    
    
    
    $
    111,038
    
    
    $
    (19,478
    )Other Real Estate Owned
    
    $
    
    
    
    $
    27,140
    
    
    $
    
    
    
    $
    27,140
    
    
    $
    (2,501
    )Other Intangible Assets
    
    $
    
    
    
    $
    
    
    
    $
    3,736
    
    
    $
    3,736
    
    
    $
    
 Assets and Liabilities Not Measured at Fair Value on a Recurring or Non-Recurring Basis
   15




---



##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Continued)
 NOTE 4  FAIR VALUE MEASUREMENTS (Continued)
  September 30, 2009
    
    December 31, 2008Carrying
    
    Estimated
    
    Carrying
    
    Estimatedor Contract
    
    Fair
    
    or Contract
    
    FairAmount
    
    Value
    
    Amount
    
    Value(In Thousands)Financial Assets:Cash and Cash Equivalents
    
    $
    213,334
    
    
    $
    213,334
    
    
    $
    215,947
    
    
    $
    215,947Investment Securities Held to Maturity
    
    $
    876
    
    
    $
    876
    
    
    $
    910
    
    
    $
    910Investment Securities Available for Sale
    
    $
    205,025
    
    
    $
    205,025
    
    
    $
    196,207
    
    
    $
    196,207Loans Receivable, Net of Allowance for Loan Losses
    
    $
    2,847,618
    
    
    $
    2,819,147
    
    
    $
    3,253,715
    
    
    $
    3,246,955Accrued Interest Receivable
    
    $
    11,389
    
    
    $
    11,389
    
    
    $
    12,347
    
    
    $
    12,347Investment in Federal Home Loan Bank Stock
    
    $
    30,697
    
    
    $
    30,697
    
    
    $
    30,697
    
    
    $
    30,697Investment in Federal Reserve Bank Stock
    
    $
    10,053
    
    
    $
    10,053
    
    
    $
    10,228
    
    
    $
    10,228Financial Liabilities:Noninterest-Bearing Deposits
    
    $
    561,548
    
    
    $
    561,548
    
    
    $
    536,944
    
    
    $
    536,944Interest-Bearing Deposits
    
    $
    2,430,312
    
    
    $
    2,437,022
    
    
    $
    2,533,136
    
    
    $
    2,538,394Borrowings
    
    $
    244,730
    
    
    $
    244,008
    
    
    $
    505,389
    
    
    $
    506,429Accrued Interest Payable
    
    $
    19,730
    
    
    $
    19,730
    
    
    $
    18,539
    
    
    $
    18,539Off-Balance Sheet Items:Commitments to Extend Credit
    
    $
    304,328
    
    
    $
    245
    
    
    $
    386,785
    
    
    $
    384Standby Letters of Credit
    
    $
    40,085
    
    
    $
    88
    
    
    $
    47,289
    
    
    $
    194
  Cash and Cash Equivalents
 Investment Securities
 Loans Receivable, Net of Allowance for Loan Losses
 Accrued Interest Receivable
 Investment in Federal Home Loan Bank Stock and Investment in Federal Reserve Bank Stock
 Noninterest-Bearing Deposits
 Interest-Bearing Deposits
 16




---



##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Continued)
 NOTE 4  FAIR VALUE MEASUREMENTS (Continued)
 Borrowings
 Accrued Interest Payable
 Commitments to Extend Credit and Standby Letters of Credit
 NOTE 5  INVESTMENT SECURITIES
  Amortized
    
    
    Gross
    
    
    Gross
    
    
    EstimatedCost
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairGain
    
    
    Loss
    
    
    Value(In Thousands)September 30, 2009:Municipal Bonds
    
    $
    695
    
    
    $
    
    
    
    $
    
    
    
    $
    695Mortgage-Backed Securities (1)
    
    
    181
    
    
    
    
    
    
    
    
    
    
    
    181$
    876
    
    
    $
    
    
    
    $
    
    
    
    $
    876December 31, 2008:Municipal Bonds
    
    $
    695
    
    
    $
    
    
    
    $
    
    
    
    $
    695Mortgage-Backed Securities (1)
    
    
    215
    
    
    
    
    
    
    
    
    
    
    
    215$
    910
    
    
    $
    
    
    
    $
    
    
    
    $
    910
 
 (1)
    
    Collateralized by residential mortgages and guaranteed by U.S. government
sponsored entities. 17




---



##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Continued)
 NOTE 5  INVESTMENT SECURITIES (Continued)
  Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gain
    
    
    Loss
    
    
    Value(In Thousands)September 30, 2009:Mortgage-Backed Securities (1)
    
    $
    78,434
    
    
    $
    1,685
    
    
    $
    30
    
    
    $
    80,089Municipal Bonds
    
    
    55,511
    
    
    
    1,999
    
    
    
    73
    
    
    
    57,437U.S. Government Agency Securities
    
    
    38,317
    
    
    
    7
    
    
    
    302
    
    
    
    38,022Collateralized Mortgage Obligations (2)
    
    
    15,240
    
    
    
    336
    
    
    
    
    
    
    
    15,576Asset-Backed Securities
    
    
    8,331
    
    
    
    88
    
    
    
    2
    
    
    
    8,417Other Securities
    
    
    3,925
    
    
    
    280
    
    
    
    33
    
    
    
    4,172Equity Securities
    
    
    511
    
    
    
    362
    
    
    
    
    
    
    
    873Corporate Bond (3)
    
    
    364
    
    
    
    75
    
    
    
    
    
    
    
    439$
    200,633
    
    
    $
    4,832
    
    
    $
    440
    
    
    $
    205,025December 31, 2008:Mortgage-Backed Securities (1)
    
    $
    77,515
    
    
    $
    1,536
    
    
    $
    191
    
    
    $
    78,860Municipal Bonds
    
    
    58,987
    
    
    
    413
    
    
    
    1,087
    
    
    
    58,313U.S. Government Agency Securities
    
    
    17,580
    
    
    
    120
    
    
    
    
    
    
    
    17,700Collateralized Mortgage Obligations (2)
    
    
    36,204
    
    
    
    137
    
    
    
    179
    
    
    
    36,162Other Securities
    
    
    3,925
    
    
    
    387
    
    
    
    112
    
    
    
    4,200Equity Securities
    
    
    511
    
    
    
    293
    
    
    
    
    
    
    
    804Corporate Bond (3)
    
    
    355
    
    
    
    
    
    
    
    186
    
    
    
    169$
    195,077
    
    
    $
    2,886
    
    
    $
    1,755
    
    
    $
    196,208
 
 (1)
    
    Collateralized by residential mortgages and guaranteed by U.S. government
sponsored entities.(2)
    
    Collateralized by residential mortgages and guaranteed by U.S. government
sponsored entities, except for two private-label securities held as of December 31,
2008 with an unrealized loss totaling $42,000. The two private-label securities were
sold during the three months ended March 31, 2009.(3)
    
    Balances presented for amortized cost, representing one corporate bond, were
net of an OTTI charge of $2.4 million, which was related to a credit loss, as of
September 30, 2009 and December 31, 2008. Therefore, the adoption of FASB ASC 320 did
not require a reclassification for the non-credit portion of previously recognized OTTI
from the opening balance of retained earnings to other comprehensive income as of March
31, 2009.  Available for Sale
    
    
    Held to MaturityEstimated
    
    
    
    
    
    
    EstimatedAmortized
    
    
    Fair
    
    
    Amortized
    
    
    FairCost
    
    
    Value
    
    
    Cost
    
    
    Value(In Thousands)Within One Year
    
    $
    5,708
    
    
    $
    6,052
    
    
    $
    
    
    
    $
    Over One Year Through Five Years
    
    
    2,873
    
    
    
    3,009
    
    
    
    
    
    
    
    Over Five Years Through Ten Years
    
    
    31,330
    
    
    
    31,624
    
    
    
    695
    
    
    
    695Over Ten Years
    
    
    66,537
    
    
    
    67,802
    
    
    
    
    
    
    
    Mortgage-Backed Securities
    
    
    78,434
    
    
    
    80,089
    
    
    
    181
    
    
    
    181Collateralized Mortgage Obligations
    
    
    15,240
    
    
    
    15,576
    
    
    
    
    
    
    
    Equity Securities
    
    
    511
    
    
    
    873
    
    
    
    
    
    
    
    $
    200,633
    
    
    $
    205,025
    
    
    $
    876
    
    
    $
    876
 18




---



##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Continued)
 NOTE 5  INVESTMENT SECURITIES (Continued)
  Holding PeriodLess than 12 Months
    
    
    12 Months or More
    
    
    TotalGross
    
    
    Estimated
    
    
    Number
    
    
    Gross
    
    
    Estimated
    
    
    Number
    
    
    Gross
    
    
    Estimated
    
    
    NumberInvestment Securities
    
    Unrealized
    
    
    Fair
    
    
    of
    
    
    Unrealized
    
    
    Fair
    
    
    of
    
    
    Unrealized
    
    
    Fair
    
    
    ofAvailable for Sale
    
    Losses
    
    
    Value
    
    
    Securities
    
    
    Losses
    
    
    Value
    
    
    Securities
    
    
    Losses
    
    
    Value
    
    
    Securities(In Thousands)September 30, 2009:Mortgage-Backed Securities
    
    $
    30
    
    
    $
    10,183
    
    
    
    6
    
    
    $
    
    
    
    $
    
    
    
    
    
    
    
    $
    30
    
    
    $
    10,183
    
    
    
    6Municipal Bonds
    
    
    7
    
    
    
    1,960
    
    
    
    3
    
    
    
    66
    
    
    
    807
    
    
    
    1
    
    
    
    73
    
    
    
    2,767
    
    
    
    4U.S. Government Agency
Securities
    
    
    302
    
    
    
    34,685
    
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    302
    
    
    
    34,685
    
    
    
    6Collateralized Mortgage
Obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Asset-Backed Securities
    
    
    2
    
    
    
    5,463
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    5,463
    
    
    
    1Other Securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33
    
    
    
    967
    
    
    
    1
    
    
    
    33
    
    
    
    967
    
    
    
    1$
    341
    
    
    $
    52,291
    
    
    
    16
    
    
    $
    99
    
    
    $
    1,774
    
    
    
    2
    
    
    $
    440
    
    
    $
    54,065
    
    
    
    18December 31, 2008:Mortgage-Backed Securities
    
    $
    158
    
    
    $
    10,631
    
    
    
    42
    
    
    $
    33
    
    
    $
    5,277
    
    
    
    4
    
    
    $
    191
    
    
    $
    15,908
    
    
    
    46Municipal Bonds
    
    
    968
    
    
    
    35,614
    
    
    
    66
    
    
    
    119
    
    
    
    1,749
    
    
    
    4
    
    
    
    1,087
    
    
    
    37,363
    
    
    
    70Collateralized Mortgage
Obligations
    
    
    36
    
    
    
    4,569
    
    
    
    4
    
    
    
    143
    
    
    
    5,903
    
    
    
    4
    
    
    
    179
    
    
    
    10,472
    
    
    
    8Other Securities
    
    
    72
    
    
    
    929
    
    
    
    1
    
    
    
    40
    
    
    
    1,960
    
    
    
    2
    
    
    
    112
    
    
    
    2,889
    
    
    
    3Corporate Bonds
    
    
    186
    
    
    
    169
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    186
    
    
    
    169
    
    
    
    1$
    1,420
    
    
    $
    51,912
    
    
    
    114
    
    
    $
    335
    
    
    $
    14,889
    
    
    
    14
    
    
    $
    1,755
    
    
    $
    66,801
    
    
    
    128
    19




---



##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Continued)
 NOTE 5  INVESTMENT SECURITIES (Continued)
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(In Thousands)Gross Realized Gains on Sales of Investment Securities
    
    $
    
    
    
    $
    
    
    
    $
    1,277
    
    
    $
    618Gross Realized Losses on Sales of Investment Securities
    
    
    
    
    
    
    (483
    )
    
    
    (109
    )
    
    
    (483
    )Net Realized Gains (Losses) on Sales of Investment
Securities
    
    $
    
    
    
    $
    (483
    )
    
    $
    1,168
    
    
    $
    135Proceeds from Sales of Investment Securities
    
    $
    
    
    
    $
    2,000
    
    
    $
    38,448
    
    
    $
    26,001Tax Expense (Benefit) on Sales of Investment Securities
    
    $
    
    
    
    $
    (203
    )
    
    $
    16,166
    
    
    $
    57
  NOTE 6  LOANS
 Loans Receivable
  September 30,
    
    
    December 31,2009
    
    
    2008(In Thousands)Real Estate Loans:Commercial Property
    
    $
    877,053
    
    
    $
    908,970Construction
    
    
    127,304
    
    
    
    178,783Residential Property
    
    
    82,378
    
    
    
    92,361Total Real Estate Loans
    
    
    1,086,735
    
    
    
    1,180,114Commercial and Industrial Loans:Commercial Term Loans
    
    
    1,477,843
    
    
    
    1,611,449SBA Loans
    
    
    135,043
    
    
    
    140,989Commercial Lines of Credit
    
    
    128,844
    
    
    
    214,699International Loans
    
    
    77,194
    
    
    
    95,185Total Commercial and Industrial Loans
    
    
    1,818,924
    
    
    
    2,062,322Consumer Loans
    
    
    68,537
    
    
    
    83,525Total Gross Loans
    
    
    2,974,196
    
    
    
    3,325,961Deferred Loan Fees
    
    
    (1,810
    )
    
    
    (1,260
    )Allowance for Loan Losses
    
    
    (124,768
    )
    
    
    (70,986
    )Loans Receivable, Net
    
    $
    2,847,618
    
    
    $
    3,253,715
 20




---



##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Continued)
 NOTE 6  LOANS (Continued)
  Allowance for Loan Losses and Allowance for Off-Balance Sheet Items
  As of and for theThree Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(In Thousands)Allowance for Loan Losses:Balance at Beginning of Period
    
    $
    105,268
    
    
    $
    62,977
    
    
    $
    70,986
    
    
    $
    43,611Actual Charge-Offs
    
    
    (30,362
    )
    
    
    (12,171
    )
    
    
    (67,210
    )
    
    
    (28,679
    )Recoveries on Loans Previously Charged Off
    
    
    487
    
    
    
    340
    
    
    
    1,925
    
    
    
    1,331Net Loan Charge-Offs
    
    
    (29,875
    )
    
    
    (11,831
    )
    
    
    (65,285
    )
    
    
    (27,348
    )Provision Charged to Operating Expenses
    
    
    49,375
    
    
    
    12,802
    
    
    
    119,067
    
    
    
    47,685Balance at End of Period
    
    $
    124,768
    
    
    $
    63,948
    
    
    $
    124,768
    
    
    $
    63,948Allowance for Off-Balance Sheet Items:Balance at Beginning of Period
    
    $
    4,291
    
    
    $
    3,932
    
    
    $
    4,096
    
    
    $
    1,765Provision Charged to Operating Expenses
    
    
    125
    
    
    
    374
    
    
    
    320
    
    
    
    2,541Balance at End of Period
    
    $
    4,416
    
    
    $
    4,306
    
    
    $
    4,416
    
    
    $
    4,306
 Impaired Loans
  September 30,
    
    
    December 31,2009
    
    
    2008(In Thousands)Recorded Investment With Related Allowance
    
    $
    190,974
    
    
    $
    71,448Recorded Investment With No Related Allowance
    
    
    39,698
    
    
    
    49,945Allowance on Impaired Loans
    
    
    (36,672
    )
    
    
    (18,157
    )Net Recorded Investment in Impaired Loans
    
    $
    194,000
    
    
    $
    103,236
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(In Thousands)Interest Income That Would Have Been Recognized Had
Impaired
Loans Performed in Accordance With Their Original Terms
    
    $
    5,473
    
    
    $
    3,716
    
    
    $
    12,126
    
    
    $
    8,148Less: Interest Income Recognized on Impaired Loans
    
    
    (3,987
    )
    
    
    (2,386
    )
    
    
    (7,591
    )
    
    
    (3,017
    )Interest Foregone on Impaired Loans
    
    $
    1,486
    
    
    $
    1,330
    
    
    $
    4,535
    
    
    $
    5,131
 21




---



##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Continued)
 NOTE 6  LOANS (Continued)
  Non-Performing Assets
  September 30,
    
    
    December 31,2009
    
    
    2008(In Thousands)Non-Accrual Loans
    
    $
    174,363
    
    
    $
    120,823Loans 90 Days or More Past Due and Still Accruing
    
    
    64
    
    
    
    1,075Total Non-Performing Loans
    
    
    174,427
    
    
    
    121,898Other Real Estate Owned, Net
    
    
    27,140
    
    
    
    823Total Non-Performing Assets
    
    $
    201,567
    
    
    $
    122,721Troubled Debt Restructurings on Accrual Status
    
    $
    69,893
    
    
    $
    
    NOTE 7  INCOME TAXES
  22




---



##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Continued)
 NOTE 7  INCOME TAXES (Continued)
  NOTE 8  SHARE-BASED COMPENSATION
 Share-Based Compensation Expense
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(In Thousands)Share-Based Compensation Expense
    
    $
    212
    
    
    $
    284
    
    
    $
    701
    
    
    $
    791Related Tax Benefits
    
    $
    89
    
    
    $
    119
    
    
    $
    295
    
    
    $
    333
 Unrecognized Share-Based Compensation Expense
  Unrecognized
    
    
    Average ExpectedExpense
    
    
    Recognition Period(Dollars in Thousands)Stock Option Awards
    
    $
    1,014
    
    
    2.2 yearsRestricted Stock Awards
    
    
    361
    
    
    4.0 yearsTotal Unrecognized Share-Based Compensation Expense
    
    $
    1,375
    
    
    2.7 years
 23




---



##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Continued)
 NOTE 8  SHARE-BASED COMPENSATION (Continued)
 Share-Based Payment Award Activity
  Weighted-
    
    
    Weighted-
    
    
    AggregateAverage
    
    
    Average
    
    
    IntrinsicNumber
    
    
    Exercise
    
    
    Remaining
    
    
    Value ofof
    
    
    Price Per
    
    
    Contractual
    
    
    In-the-MoneyShares
    
    
    Share
    
    
    Life
    
    
    Options(Dollars in Thousands, Except Per Share Data)Options Outstanding at Beginning of Period
    
    
    1,355,917
    
    
    $
    11.41
    
    
    6.5 years
    
    $
    96
    (1)Options Granted
    
    
    20,000
    
    
    $
    1.69
    
    
    9.7 yearsOptions Expired
    
    
    (105,648
    )
    
    $
    8.43
    
    
    2.6 yearsOptions Forfeited
    
    
    (24,400
    )
    
    $
    4.63
    
    
    9.2 yearsOptions Outstanding at End of Period
    
    
    1,245,869
    
    
    $
    11.64
    
    
    6.5 years
    
    $
    68
    (1)Options Exercisable at End of Period
    
    
    728,958
    
    
    $
    14.03
    
    
    5.2 years
    
    $
    
 
 (1)
    
    Intrinsic value represents the excess of the closing stock price on the
last trading day of the period, which was $1.75 as of June 30, 2009, over the exercise
price, multiplied by the number of options.(2)
    
    Intrinsic value represents the excess of the closing stock price on the last
trading day of the period, which was $1.64 as of September 30, 2009, over the exercise
price, multiplied by the number of options.  Weighted-
    
    
    Weighted-
    
    
    AggregateAverage
    
    
    Average
    
    
    IntrinsicNumber
    
    
    Exercise
    
    
    Remaining
    
    
    Value ofof
    
    
    Price Per
    
    
    Contractual
    
    
    In-the-MoneyShares
    
    
    Share
    
    
    Life
    
    
    Options(Dollars in Thousands, Except Per Share Data)Options Outstanding at Beginning of Period
    
    
    1,323,467
    
    
    $
    14.05
    
    
    6.3 years
    
    $
    Options Granted
    
    
    270,000
    
    
    $
    1.39
    
    
    9.5 yearsOptions Expired
    
    
    (243,998
    )
    
    $
    12.27
    
    
    4.1 yearsOptions Forfeited
    
    
    (103,600
    )
    
    $
    14.32
    
    
    7.3 yearsOptions Outstanding at End of Period
    
    
    1,245,869
    
    
    $
    11.64
    
    
    6.5 years
    
    $
    68
    (1)Options Exercisable at End of Period
    
    
    728,958
    
    
    $
    14.03
    
    
    5.2 years
    
    $
    
 
 (1)
    
    Intrinsic value represents the excess of the closing stock price on the
last trading day of the period, which was $1.64 as of September 30, 2009, over the
exercise price, multiplied by the number of options.  24




---



##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Continued)
 NOTE 8  SHARE-BASED COMPENSATION (Continued)
 Restricted Stock Awards
  Three Months Ended
    
    
    Nine Months EndedSeptember 30, 2009
    
    
    September 30, 2009Weighted-
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    AverageNumber
    
    
    Grant Date
    
    
    Number
    
    
    Grant Dateof
    
    
    Fair Value
    
    
    of
    
    
    Fair ValueShares
    
    
    Per Share
    
    
    Shares
    
    
    Per ShareRestricted Stock at Beginning of Period
    
    
    206,200
    
    
    $
    2.09
    
    
    
    20,200
    
    
    $
    11.42Restricted Stock Granted
    
    
    15,000
    
    
    $
    1.69
    
    
    
    205,000
    
    
    $
    1.41Restricted Stock Vested
    
    
    (1,000
    )
    
    $
    5.15
    
    
    
    (1,000
    )
    
    $
    5.15Restricted Stock Forfeited
    
    
    (15,000
    )
    
    $
    1.69
    
    
    
    (19,000
    )
    
    $
    4.73Restricted Stock at End of Period
    
    
    205,200
    
    
    $
    2.08
    
    
    
    205,200
    
    
    $
    2.08
 NOTE 9  STOCKHOLDERS EQUITY
 Securities Purchase Agreement
    25




---



##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Continued)
 NOTE 10  EARNINGS (LOSS) PER SHARE
   2009
    
    
    2008(Numerator)
    
    
    (Denominator)
    
    
    
    
    
    
    (Numerator)
    
    
    (Denominator)Weighted-
    
    
    Per
    
    
    Net
    
    
    Weighted-
    
    
    PerNet
    
    
    Average
    
    
    Share
    
    
    Income
    
    
    Average
    
    
    ShareLoss
    
    
    Shares
    
    
    Amount
    
    
    (Loss)
    
    
    Shares
    
    
    Amount(Dollars in Thousands, Except Per Share Data)Three Months Ended September 30:Basic EPS
    
    $
    (59,665
    )
    
    
    47,413,141
    
    
    $
    (1.26
    )
    
    $
    4,348
    
    
    
    45,881,549
    
    
    $
    0.09Effect of Dilutive Securities  Options, Warrants
and Unvested Restricted Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51,494
    
    
    
    Diluted EPS
    
    $
    (59,665
    )
    
    
    47,413,141
    
    
    $
    (1.26
    )
    
    $
    4,348
    
    
    
    45,933,043
    
    
    $
    0.09Nine Months Ended September 30:Basic EPS
    
    $
    (86,396
    )
    
    
    46,415,225
    
    
    $
    (1.86
    )
    
    $
    (98,278
    )
    
    
    45,869,069
    
    
    $
    (2.14
    )Effect of Dilutive Securities  Options, Warrants
and Unvested Restricted Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Diluted EPS
    
    $
    (86,396
    )
    
    
    46,415,225
    
    
    $
    (1.86
    )
    
    $
    (98,278
    )
    
    
    45,869,069
    
    
    $
    (2.14
    )
  NOTE 11  OFF-BALANCE SHEET COMMITMENTS
  26




---



##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Continued)
 NOTE 11  OFF-BALANCE SHEET COMMITMENTS (Continued)
  September 30,
    
    
    December 31,2009
    
    
    2008(In Thousands)Commitments to Extend Credit
    
    $
    304,328
    
    
    $
    386,785Standby Letters of Credit
    
    
    40,085
    
    
    
    47,289Unused Credit Card Lines
    
    
    19,281
    
    
    
    16,912Commercial Letters of Credit
    
    
    15,568
    
    
    
    29,177Total Undisbursed Loan Commitments
    
    $
    379,262
    
    
    $
    480,163
 NOTE 12  SEGMENT REPORTING
  NOTE 13  SUBSEQUENT EVENTS
  Regulatory Action
   27




---



##### Table of Contents



HANMI FINANCIAL CORPORATION AND SUBSIDIARIES  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)  THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (Continued)
 NOTE 13  SUBSEQUENT EVENTS (Continued)
  Ratio of Tangible ShareholdersDate
    
    Equity to Total Tangible AssetsBy December 31, 2009
    
    Not Less Than 7.0 PercentBy July 31, 2010
    
    Not Less Than 9.0 PercentFrom December 31, 2010 and Until the Order is Terminated
    
    Not Less Than 9.5 Percent
   28




---



##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  FORWARD-LOOKING STATEMENTS
 Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
 
    
    failure to maintain adequate levels of capital and liquidity to support our operations;
    
    a significant number of our customers failing to perform under their loans and other
terms of credit agreements;
    
    the effect of regulatory orders we have entered into and potential future regulatory
enforcement action against us or the Bank;
    
    fluctuations in interest rates and a decline in the level of our interest rate spread;
    
    failure to attract or retain deposits;
    
    sources of liquidity available to us and to the Bank becoming limited or our potential
inability to access sufficient sources of liquidity when needed or the requirement that we
obtain government waivers to do so;
    
    adverse changes in domestic or global financial markets, economic conditions or
business conditions or the effects of pandemic flu;
    
    regulatory restrictions on the Banks ability to pay dividends to us and on our ability
to make payments on Hanmi Financial obligations;
    
    significant reliance on loans secured by real estate and the associated vulnerability
to downturns in the local real estate market, natural disasters and other variables
impacting the value of real estate;
    
    failure to retain our key employees;
    
    failure to maintain our status as a financial holding company;
    
    adequacy of our allowance for loan losses;
    
    credit quality and the effect of credit quality on our provision for credit losses and
allowance for loan losses;
    
    failure to manage our future growth or successfully integrate acquisitions;
    
    volatility and disruption in financial, credit and securities markets, and the price of
our common stock;
    
    deterioration in the financial markets that may result in other-than-temporary
impairment charges relating to our securities portfolio;
    
    competition in our primary market areas;
    
    demographic changes in our primary market areas; and
    
    significant government regulations, legislation and potential changes thereto.
 Item 2. Managements Discussion and
Analysis of Financial Condition and Results of Operations Item 1A. Risk Factors. Item 1A. Risk Factors Item 7. Managements Discussion and Analysis of Financial Condition
and Results of Operations
 29




---



##### Table of Contents



CRITICAL ACCOUNTING POLICIES
 Notes to Consolidated Financial Statements, Note 1  Summary of Significant Accounting Policies Investment
Securities, Item 7. Managements Discussion and Analysis of
Financial Condition and Results of Operations  Critical Accounting Policies
 Investment Securities
 Notes to Consolidated Financial Statements, Note 1  Summary of Significant Accounting Policies
  Notes to Consolidated
Financial Statements (Unaudited), Note 5  Investment Securities
 30




---



##### Table of Contents



SELECTED FINANCIAL DATA
  As of and for theThree Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2009
    
    2008
    
    2009
    
    2008(Dollars in Thousands, Except Per Share Data)AVERAGE BALANCES:Average Gross Loans, Net (1)
    
    $
    3,078,104
    
    
    $
    3,341,250
    
    
    $
    3,235,455
    
    
    $
    3,320,559Average Investment Securities
    
    $
    209,021
    
    
    $
    244,027
    
    
    $
    190,243
    
    
    $
    294,130Average Interest-Earning Assets
    
    $
    3,552,698
    
    
    $
    3,630,755
    
    
    $
    3,718,837
    
    
    $
    3,659,255Average Total Assets
    
    $
    3,672,253
    
    
    $
    3,789,614
    
    
    $
    3,842,266
    
    
    $
    3,892,197Average Deposits
    
    $
    3,100,419
    
    
    $
    2,895,746
    
    
    $
    3,174,880
    
    
    $
    2,924,416Average Borrowings
    
    $
    297,455
    
    
    $
    590,401
    
    
    $
    374,139
    
    
    $
    588,267Average Interest-Bearing Liabilities
    
    $
    2,844,821
    
    
    $
    2,835,917
    
    
    $
    3,013,651
    
    
    $
    2,861,288Average Stockholders Equity
    
    $
    232,136
    
    
    $
    267,433
    
    
    $
    249,742
    
    
    $
    340,894Average Tangible Equity (2)
    
    $
    228,169
    
    
    $
    261,751
    
    
    $
    245,377
    
    
    $
    263,870PER SHARE DATA:Earnings (Loss) Per Share  Basic
    
    $
    (1.26
    )
    
    $
    0.09
    
    
    $
    (1.86
    )
    
    $
    (2.14
    )Earnings (Loss) Per Share  Diluted
    
    $
    (1.26
    )
    
    $
    0.09
    
    
    $
    (1.86
    )
    
    $
    (2.14
    )Common Shares Outstanding
    
    
    51,201,390
    
    
    
    45,905,549
    
    
    
    51,201,390
    
    
    
    45,905,549Book Value Per Share (3)
    
    $
    3.65
    
    
    $
    5.82
    
    
    $
    3.65
    
    
    $
    5.82Tangible Book Value Per Share (4)
    
    $
    3.58
    
    
    $
    5.70
    
    
    $
    3.58
    
    
    $
    5.70Cash Dividends Per Share
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    0.09SELECTED PERFORMANCE RATIOS:Return on Average Assets (5) (6)
    
    
    (6.45
    %)
    
    
    0.46
    %
    
    
    (3.01
    %)
    
    
    (3.37
    %)Return on Average Stockholders Equity (5) (7)
    
    
    (101.97
    %)
    
    
    6.47
    %
    
    
    (46.25
    %)
    
    
    (38.51
    %)Return on Average Tangible Equity (5) (8)
    
    
    (103.75
    %)
    
    
    6.61
    %
    
    
    (47.08
    %)
    
    
    (49.75
    %)Efficiency Ratio (9)
    
    
    68.21
    %
    
    
    54.33
    %
    
    
    69.38
    %
    
    
    134.73
    %Net Interest Spread (10)
    
    
    2.47
    %
    
    
    3.21
    %
    
    
    2.08
    %
    
    
    3.02
    %Net Interest Margin (11)
    
    
    3.00
    %
    
    
    3.94
    %
    
    
    2.65
    %
    
    
    3.83
    %Dividend Payout Ratio (12)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4.20
    %)Average Stockholders Equity to Average Total Assets
    
    
    6.32
    %
    
    
    7.06
    %
    
    
    6.50
    %
    
    
    8.76
    %SELECTED CAPITAL RATIOS:(13)Total Risk-Based Capital Ratio:Hanmi Financial
    
    
    9.15
    %
    
    
    10.93
    %Hanmi Bank
    
    
    9.69
    %
    
    
    10.84
    %Tier 1 Risk-Based Capital Ratio:Hanmi Financial
    
    
    7.86
    %
    
    
    9.66
    %Hanmi Bank
    
    
    8.40
    %
    
    
    9.57
    %Tier 1 Leverage Ratio:Hanmi Financial
    
    
    6.60
    %
    
    
    9.02
    %Hanmi Bank
    
    
    7.05
    %
    
    
    8.94
    %SELECTED ASSET QUALITY RATIOS:Non-Performing Loans to Total Gross Loans (14)
    
    
    5.85
    %
    
    
    3.34
    %
    
    
    5.85
    %
    
    
    3.34
    %Non-Performing Assets to Total Assets (15)
    
    
    5.83
    %
    
    
    3.05
    %
    
    
    5.83
    %
    
    
    3.05
    %Net Loan Charge-Offs to Average Total Gross Loans (16)
    
    
    3.85
    %
    
    
    1.41
    %
    
    
    2.70
    %
    
    
    1.10
    %Allowance for Loan Losses to Total Gross Loans
    
    
    4.19
    %
    
    
    1.91
    %
    
    
    4.19
    %
    
    
    1.91
    %Allowance for Loan Losses to Non-Performing Loans
    
    
    71.53
    %
    
    
    57.16
    %
    
    
    71.53
    %
    
    
    57.16
    %
 
 (1)
    
    Loans are net of deferred fees and related direct costs.(2)
    
    Average tangible equity is calculated by subtracting average goodwill and average
other intangible assets from average stockholders equity. See Non-GAAP Financial Measures.(3)
    
    Total stockholders equity divided by common shares outstanding.(4)
    
    Tangible equity divided by common shares outstanding. See Non-GAAP Financial Measures.(5)
    
    Calculation based upon annualized net loss.(6)
    
    Net loss divided by average total assets.(7)
    
    Net loss divided by average stockholders equity.(8)
    
    Net loss divided by average tangible equity. See Non-GAAP Financial Measures.(9)
    
    Total non-interest expenses divided by the sum of net interest income before provision for credit losses and total non-interest income.(10)
    
    Average yield earned on interest-earning assets less average rate paid on
interest-bearing liabilities. Computed on a tax-equivalent basis using an effective marginal
rate of 35 percent.(11)
    
    Net interest income before provision for credit losses divided by average
interest-earning assets. Computed on a tax-equivalent basis using an effective marginal rate
of 35 percent.(12)
    
    Cash dividends per share times common shares outstanding divided by net loss.(13)
    
    The required ratios for a well-capitalized institution, as defined by regulations
of the Board of Governors of the Federal Reserve System, are 10 percent for the Total
Risk-Based Capital Ratio (total capital divided by total risk-weighted assets); 6 percent for
the Tier 1 Risk-Based Capital Ratio (Tier 1 capital divided by total risk-weighted assets);
and 5 percent for the Tier 1 Leverage Ratio (Tier 1 capital divided by average total assets).(14)
    
    Non-performing loans consist of non-accrual loans and loans past due 90 days or more and still accruing interest.(15)
    
    Non-performing assets consist of non-performing loans (see footnote (14) above) and other real estate owned.(16)
    
    Calculation based upon annualized net loan charge-offs. 31




---



##### Table of Contents



Non-GAAP Financial Measures
 Return on Average Tangible Equity
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Dollars in Thousands)Average Stockholders Equity
    
    $
    232,136
    
    
    $
    267,433
    
    
    $
    249,742
    
    
    $
    340,894Less Average Goodwill and Average Other Intangible Assets
    
    
    (3,967
    )
    
    
    (5,682
    )
    
    
    (4,365
    )
    
    
    (77,024
    )Average Tangible Equity
    
    $
    228,169
    
    
    $
    261,751
    
    
    $
    245,377
    
    
    $
    263,870Return on Average Stockholders Equity
    
    
    (101.97
    %)
    
    
    6.47
    %
    
    
    (46.25
    %)
    
    
    (38.51
    %)Effect of Average Goodwill and Average Other Intangible Assets
    
    
    (1.78
    %)
    
    
    0.14
    %
    
    
    (0.83
    %)
    
    
    (11.24
    %)Return on Average Tangible Equity
    
    
    (103.75
    %)
    
    
    6.61
    %
    
    
    (47.08
    %)
    
    
    (49.75
    %)
 Tangible Book Value Per Share
   September 30,2009
    
    
    2008(Dollars in Thousands, Except Per Share Data)Total Stockholders Equity
    
    $
    187,120
    
    
    $
    267,196Less Goodwill and Other Intangible Assets
    
    
    (3,736
    )
    
    
    (5,404
    )Tangible Equity
    
    $
    183,384
    
    
    $
    261,792Book Value Per Share
    
    $
    3.65
    
    
    $
    5.82Effect of Goodwill and Other Intangible Assets
    
    
    (0.07
    )
    
    
    (0.12
    )Tangible Book Value Per Share
    
    $
    3.58
    
    
    $
    5.70
 32




---



##### Table of Contents



EXECUTIVE OVERVIEW
    Liquidity and Capital Resources  Liquidity  Hanmi Bank
   RESULTS OF OPERATIONS
 Net Interest Income Before Provision for Credit Losses
  33




---



##### Table of Contents



Three Months Ended September 30, 2009 vs. Three Months Ended September 30, 2008
  Three Months EndedSeptember 30, 2009
    
    
    September 30, 2008Interest
    
    
    Average
    
    
    
    
    
    
    Interest
    
    
    AverageAverage
    
    
    Income/
    
    
    Yield/
    
    
    Average
    
    
    Income/
    
    
    Yield/Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    Rate(Dollars in Thousands)ASSETSInterest-Earning Assets:Gross Loans, Net (1)
    
    $
    3,078,104
    
    
    $
    42,705
    
    
    
    5.50
    %
    
    $
    3,341,250
    
    
    $
    56,134
    
    
    
    6.68
    %Municipal Securities (2)
    
    
    58,179
    
    
    
    933
    
    
    
    6.41
    %
    
    
    60,979
    
    
    
    1,000
    
    
    
    6.56
    %Obligations of Other U.S. Government Agencies
    
    
    37,969
    
    
    
    431
    
    
    
    4.54
    %
    
    
    46,777
    
    
    
    483
    
    
    
    4.13
    %Other Debt Securities
    
    
    112,873
    
    
    
    1,110
    
    
    
    3.93
    %
    
    
    136,271
    
    
    
    1,566
    
    
    
    4.60
    %Equity Securities (5)
    
    
    41,741
    
    
    
    214
    
    
    
    2.05
    %
    
    
    39,929
    
    
    
    581
    
    
    
    5.82
    %Federal Funds Sold and Securities Purchased Under Resale Agreements
    
    
    56,568
    
    
    
    67
    
    
    
    0.47
    %
    
    
    4,797
    
    
    
    23
    
    
    
    1.92
    %Term Federal Funds Sold
    
    
    90,239
    
    
    
    293
    
    
    
    1.30
    %
    
    
    
    
    
    
    
    
    
    
    Interest-Bearing Deposits in Other Banks
    
    
    77,025
    
    
    
    68
    
    
    
    0.35
    %
    
    
    752
    
    
    
    4
    
    
    
    2.13
    %Total Interest-Earning Assets (2)
    
    
    3,552,698
    
    
    
    45,821
    
    
    
    5.12
    %
    
    
    3,630,755
    
    
    
    59,791
    
    
    
    6.55
    %Noninterest-Earning Assets:Cash and Cash Equivalents
    
    
    67,318
    
    
    
    
    
    
    
    
    
    
    
    89,574Allowance for Loan Losses
    
    
    (119,653
    )
    
    
    
    
    
    
    
    
    
    
    (64,737
    )Other Assets
    
    
    171,890
    
    
    
    
    
    
    
    
    
    
    
    134,022Total Noninterest-Earning Assets
    
    
    119,555
    
    
    
    
    
    
    
    
    
    
    
    158,859TOTAL ASSETS
    
    $
    3,672,253
    
    
    
    
    
    
    
    
    
    
    $
    3,789,614LIABILITIES AND STOCKHOLDERS EQUITYInterest-Bearing Liabilities:Deposits:Savings
    
    $
    93,404
    
    
    
    585
    
    
    
    2.48
    %
    
    $
    91,465
    
    
    
    533
    
    
    
    2.32
    %Money Market Checking and NOW Accounts
    
    
    629,124
    
    
    
    2,998
    
    
    
    1.89
    %
    
    
    693,718
    
    
    
    5,579
    
    
    
    3.20
    %Time Deposits of $100,000 or More
    
    
    983,341
    
    
    
    7,447
    
    
    
    3.00
    %
    
    
    973,752
    
    
    
    8,709
    
    
    
    3.56
    %Other Time Deposits
    
    
    841,497
    
    
    
    6,335
    
    
    
    2.99
    %
    
    
    486,581
    
    
    
    4,544
    
    
    
    3.72
    %Federal Home Loan Bank Advances
    
    
    213,583
    
    
    
    865
    
    
    
    1.61
    %
    
    
    506,981
    
    
    
    3,324
    
    
    
    2.61
    %Other Borrowings
    
    
    1,466
    
    
    
    
    
    
    
    
    
    
    
    1,014
    
    
    
    5
    
    
    
    1.96
    %Junior Subordinated Debentures
    
    
    82,406
    
    
    
    747
    
    
    
    3.60
    %
    
    
    82,406
    
    
    
    1,150
    
    
    
    5.55
    %Total Interest-Bearing Liabilities
    
    
    2,844,821
    
    
    
    18,977
    
    
    
    2.65
    %
    
    
    2,835,917
    
    
    
    23,844
    
    
    
    3.34
    %Noninterest-Bearing Liabilities:Demand Deposits
    
    
    553,053
    
    
    
    
    
    
    
    
    
    
    
    650,230Other Liabilities
    
    
    42,243
    
    
    
    
    
    
    
    
    
    
    
    36,034Total Noninterest-Bearing Liabilities
    
    
    595,296
    
    
    
    
    
    
    
    
    
    
    
    686,264Total Liabilities
    
    
    3,440,117
    
    
    
    
    
    
    
    
    
    
    
    3,522,181Stockholders Equity
    
    
    232,136
    
    
    
    
    
    
    
    
    
    
    
    267,433TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    3,672,253
    
    
    
    
    
    
    
    
    
    
    $
    3,789,614NET INTEREST INCOME
    
    
    
    
    
    $
    26,844
    
    
    
    
    
    
    
    
    
    
    $
    35,947NET INTEREST SPREAD(2)(3)
    
    
    
    
    
    
    
    
    
    
    2.47
    %
    
    
    
    
    
    
    
    
    
    
    3.21
    %NET INTEREST MARGIN(2)(4)
    
    
    
    
    
    
    
    
    
    
    3.00
    %
    
    
    
    
    
    
    
    
    
    
    3.94
    %
 
 (1)
    
    Loans are net of deferred fees and related direct costs, but excluding the allowance
for loan losses. Non-accrual loans are included in the average loan balance. Loan fees have
been included in the calculation of interest income. Loan fees were $654,000 and $544,000 for
the three months ended September 30, 2009 and 2008, respectively.(2)
    
    Computed on a tax-equivalent basis using an effective marginal rate of 35 percent.(3)
    
    Represents the average rate earned on interest-earning assets less the average rate
paid on interest-bearing liabilities.(4)
    
    Represents annualized net interest income as a percentage of average
interest-earning assets.(5)
    
    Includes investment in Federal Home Loan Bank stock and investment in Federal
Reserve Bank stock. 34




---



##### Table of Contents



Three Months Ended September 30, 2009 vs.Three Months Ended September 30, 2008Increases (Decreases) Due to Change inVolume
    
    
    Rate
    
    
    Total(In Thousands)Interest and Dividend Income:Gross Loans, Net
    
    $
    (4,144
    )
    
    $
    (9,285
    )
    
    $
    (13,429
    )Municipal Securities
    
    
    (45
    )
    
    
    (22
    )
    
    
    (67
    )Obligations of Other U.S. Government Agencies
    
    
    (97
    )
    
    
    45
    
    
    
    (52
    )Other Debt Securities
    
    
    (248
    )
    
    
    (208
    )
    
    
    (456
    )Equity Securities
    
    
    25
    
    
    
    (392
    )
    
    
    (367
    )Federal Funds Sold and Securities Purchased Under Resale Agreements
    
    
    73
    
    
    
    (29
    )
    
    
    44Term Federal Funds Sold
    
    
    293
    
    
    
    
    
    
    
    293Interest-Bearing Deposits in Other Banks
    
    
    69
    
    
    
    (5
    )
    
    
    64Total Interest and Dividend Income
    
    
    (4,074
    )
    
    
    (9,896
    )
    
    
    (13,970
    )Interest Expense:Savings
    
    
    12
    
    
    
    40
    
    
    
    52Money Market Checking and NOW Accounts
    
    
    (479
    )
    
    
    (2,102
    )
    
    
    (2,581
    )Time Deposits of $100,000 or More
    
    
    87
    
    
    
    (1,349
    )
    
    
    (1,262
    )Other Time Deposits
    
    
    2,820
    
    
    
    (1,029
    )
    
    
    1,791Federal Home Loan Bank Advances
    
    
    (1,478
    )
    
    
    (981
    )
    
    
    (2,459
    )Other Borrowings
    
    
    1
    
    
    
    (6
    )
    
    
    (5
    )Junior Subordinated Debentures
    
    
    
    
    
    
    (403
    )
    
    
    (403
    )Total Interest Expense
    
    
    963
    
    
    
    (5,830
    )
    
    
    (4,867
    )Change in Net Interest Income
    
    $
    (5,037
    )
    
    $
    (4,066
    )
    
    $
    (9,103
    )
    35




---



##### Table of Contents



Nine Months Ended September 30, 2009 vs. Nine Months Ended September 30, 2008
  Nine Months EndedSeptember 30, 2009
    
    
    September 30, 2008Interest
    
    
    Average
    
    
    
    
    
    
    Interest
    
    
    AverageAverage
    
    
    Income/
    
    
    Yield/
    
    
    Average
    
    
    Income/
    
    
    Yield/Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    Rate(Dollars in Thousands)ASSETSInterest-Earning Assets:Gross Loans, Net (1)
    
    $
    3,235,455
    
    
    $
    132,508
    
    
    
    5.48
    %
    
    $
    3,320,559
    
    
    $
    172,637
    
    
    
    6.94
    %Municipal Securities (2)
    
    
    58,760
    
    
    
    2,878
    
    
    
    6.53
    %
    
    
    65,329
    
    
    
    3,186
    
    
    
    6.50
    %Obligations of Other U.S. Government Agencies
    
    
    20,345
    
    
    
    671
    
    
    
    4.40
    %
    
    
    80,120
    
    
    
    2,612
    
    
    
    4.35
    %Other Debt Securities
    
    
    111,138
    
    
    
    3,590
    
    
    
    4.31
    %
    
    
    148,681
    
    
    
    5,131
    
    
    
    4.60
    %Equity Securities (5)
    
    
    41,667
    
    
    
    520
    
    
    
    1.66
    %
    
    
    37,160
    
    
    
    1,481
    
    
    
    5.31
    %Federal Funds Sold and Securities Purchased Under Resale Agreements
    
    
    95,365
    
    
    
    261
    
    
    
    0.36
    %
    
    
    7,096
    
    
    
    137
    
    
    
    2.57
    %Term Federal Funds Sold
    
    
    125,249
    
    
    
    1,688
    
    
    
    1.80
    %
    
    
    
    
    
    
    
    
    
    
    Interest-Bearing Deposits in Other Banks
    
    
    30,858
    
    
    
    81
    
    
    
    0.35
    %
    
    
    310
    
    
    
    5
    
    
    
    2.15
    %Total Interest-Earning Assets (2)
    
    
    3,718,837
    
    
    
    142,197
    
    
    
    5.11
    %
    
    
    3,659,255
    
    
    
    185,189
    
    
    
    6.76
    %Noninterest-Earning Assets:Cash and Cash Equivalents
    
    
    72,115
    
    
    
    
    
    
    
    
    
    
    
    89,674Allowance for Loan Losses
    
    
    (95,546
    )
    
    
    
    
    
    
    
    
    
    
    (53,364
    )Other Assets
    
    
    146,860
    
    
    
    
    
    
    
    
    
    
    
    196,632Total Noninterest-Earning Assets
    
    
    123,429
    
    
    
    
    
    
    
    
    
    
    
    232,942TOTAL ASSETS
    
    $
    3,842,266
    
    
    
    
    
    
    
    
    
    
    $
    3,892,197LIABILITIES AND STOCKHOLDERS EQUITYInterest-Bearing Liabilities:Deposits:Savings
    
    $
    86,715
    
    
    
    1,617
    
    
    
    2.49
    %
    
    $
    91,910
    
    
    
    1,587
    
    
    
    2.31
    %Money Market Checking and NOW Accounts
    
    
    431,646
    
    
    
    6,278
    
    
    
    1.94
    %
    
    
    656,625
    
    
    
    15,946
    
    
    
    3.24
    %Time Deposits of $100,000 or More
    
    
    1,124,876
    
    
    
    29,877
    
    
    
    3.55
    %
    
    
    1,143,975
    
    
    
    35,436
    
    
    
    4.14
    %Other Time Deposits
    
    
    996,275
    
    
    
    25,064
    
    
    
    3.36
    %
    
    
    380,511
    
    
    
    11,730
    
    
    
    4.12
    %Federal Home Loan Bank Advances
    
    
    290,142
    
    
    
    2,987
    
    
    
    1.38
    %
    
    
    492,434
    
    
    
    11,406
    
    
    
    3.09
    %Other Borrowings
    
    
    1,591
    
    
    
    2
    
    
    
    0.17
    %
    
    
    13,427
    
    
    
    344
    
    
    
    3.42
    %Junior Subordinated Debentures
    
    
    82,406
    
    
    
    2,581
    
    
    
    4.19
    %
    
    
    82,406
    
    
    
    3,763
    
    
    
    6.10
    %Total Interest-Bearing Liabilities
    
    
    3,013,651
    
    
    
    68,406
    
    
    
    3.03
    %
    
    
    2,861,288
    
    
    
    80,212
    
    
    
    3.74
    %Noninterest-Bearing Liabilities:Demand Deposits
    
    
    535,368
    
    
    
    
    
    
    
    
    
    
    
    651,395Other Liabilities
    
    
    43,505
    
    
    
    
    
    
    
    
    
    
    
    38,620Total Noninterest-Bearing Liabilities
    
    
    578,873
    
    
    
    
    
    
    
    
    
    
    
    690,015Total Liabilities
    
    
    3,592,524
    
    
    
    
    
    
    
    
    
    
    
    3,551,303Stockholders Equity
    
    
    249,742
    
    
    
    
    
    
    
    
    
    
    
    340,894TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    3,842,266
    
    
    
    
    
    
    
    
    
    
    $
    3,892,197NET INTEREST INCOME
    
    
    
    
    
    $
    73,791
    
    
    
    
    
    
    
    
    
    
    $
    104,977NET INTEREST SPREAD(2)(3)
    
    
    
    
    
    
    
    
    
    
    2.08
    %
    
    
    
    
    
    
    
    
    
    
    3.02
    %NET INTEREST MARGIN(2)(4)
    
    
    
    
    
    
    
    
    
    
    2.65
    %
    
    
    
    
    
    
    
    
    
    
    3.83
    %
 
 (1)
    
    Loans are net of deferred fees and related direct costs, but excluding the allowance
for loan losses. Non-accrual loans are included in the average loan balance. Loan fees have
been included in the calculation of interest income. Loan fees were $1.5 million and $2.0
million for the nine months ended September 30, 2009 and 2008, respectively.(2)
    
    Computed on a tax-equivalent basis using an effective marginal rate of 35 percent.(3)
    
    Represents the average rate earned on interest-earning assets less the average rate
paid on interest-bearing liabilities.(4)
    
    Represents annualized net interest income as a percentage of average
interest-earning assets.(5)
    
    Includes investment in Federal Home Loan Bank stock and investment in Federal
Reserve Bank stock. 36




---



##### Table of Contents



Nine Months Ended September 30, 2009 vs.Nine Months Ended September 30, 2008Increases (Decreases) Due to Change inVolume
    
    
    Rate
    
    
    Total(In Thousands)Interest and Dividend Income:Gross Loans, Net
    
    $
    (4,337
    )
    
    $
    (35,792
    )
    
    $
    (40,129
    )Municipal Securities
    
    
    (342
    )
    
    
    34
    
    
    
    (308
    )Obligations of Other U.S. Government Agencies
    
    
    (2,018
    )
    
    
    77
    
    
    
    (1,941
    )Other Debt Securities
    
    
    (1,229
    )
    
    
    (312
    )
    
    
    (1,541
    )Equity Securities
    
    
    398
    
    
    
    (1,359
    )
    
    
    (961
    )Federal Funds Sold and Securities Purchased Under Resale Agreements
    
    
    507
    
    
    
    (383
    )
    
    
    124Term Federal Funds Sold
    
    
    1,688
    
    
    
    
    
    
    
    1,688Interest-Bearing Deposits in Other Banks
    
    
    89
    
    
    
    (13
    )
    
    
    76Total Interest and Dividend Income
    
    
    (5,244
    )
    
    
    (37,748
    )
    
    
    (42,992
    )Interest Expense:Savings
    
    
    (93
    )
    
    
    123
    
    
    
    30Money Market Checking and NOW Accounts
    
    
    (4,458
    )
    
    
    (5,210
    )
    
    
    (9,668
    )Time Deposits of $100,000 or More
    
    
    (586
    )
    
    
    (4,973
    )
    
    
    (5,559
    )Other Time Deposits
    
    
    15,834
    
    
    
    (2,500
    )
    
    
    13,334Federal Home Loan Bank Advances
    
    
    (3,580
    )
    
    
    (4,839
    )
    
    
    (8,419
    )Other Borrowings
    
    
    (164
    )
    
    
    (178
    )
    
    
    (342
    )Junior Subordinated Debentures
    
    
    
    
    
    
    (1,182
    )
    
    
    (1,182
    )Total Interest Expense
    
    
    6,953
    
    
    
    (18,759
    )
    
    
    (11,806
    )Change in Net Interest Income
    
    $
    (12,197
    )
    
    $
    (18,989
    )
    
    $
    (31,186
    )
    37




---



##### Table of Contents



Provision for Credit Losses
 Non-Performing Assets Allowance for Loan Losses and Allowance for Off-Balance
Sheet Items
 Non-Interest Income
  Three Months Ended September 30, 2009 vs. Three Months Ended September 30, 2008
  Three Months EndedSeptember 30,
    
    
    Increase (Decrease)2009
    
    
    2008
    
    
    Amount
    
    
    Percentage(Dollars in Thousands)Service Charges on Deposit Accounts
    
    $
    4,275
    
    
    $
    4,648
    
    
    $
    (373
    )
    
    
    (8.0
    %)Insurance Commissions
    
    
    1,063
    
    
    
    1,194
    
    
    
    (131
    )
    
    
    (11.0
    %)Remittance Fees
    
    
    511
    
    
    
    499
    
    
    
    12
    
    
    
    2.4
    %Trade Finance Fees
    
    
    512
    
    
    
    784
    
    
    
    (272
    )
    
    
    (34.7
    %)Other Service Charges and Fees
    
    
    489
    
    
    
    433
    
    
    
    56
    
    
    
    12.9
    %Net Gain on Sales of Loans
    
    
    864
    
    
    
    
    
    
    
    864
    
    
    
    Bank-Owned Life Insurance Income
    
    
    234
    
    
    
    241
    
    
    
    (7
    )
    
    
    (2.9
    %)Loss on Sales of Investment Securities
    
    
    
    
    
    
    (483
    )
    
    
    483
    
    
    
    (100.0
    %)Other-Than-Temporary Impairment Loss on Investment Securities
    
    
    
    
    
    
    (2,410
    )
    
    
    2,410
    
    
    
    (100.0
    %)Other Operating Income
    
    
    265
    
    
    
    422
    
    
    
    (157
    )
    
    
    (37.2
    %)Total Non-Interest Income
    
    $
    8,213
    
    
    $
    5,328
    
    
    $
    2,885
    
    
    
    54.1
    %
   38




---



##### Table of Contents



Financial Condition  Investment Portfolio
 Nine Months Ended September 30, 2009 vs. Nine Months Ended September 30, 2008
  Nine Months EndedSeptember 30,
    
    
    Increase (Decrease)2009
    
    
    2008
    
    
    Amount
    
    
    Percentage(Dollars in Thousands)Service Charges on Deposit Accounts
    
    $
    13,032
    
    
    $
    13,904
    
    
    $
    (872
    )
    
    
    (6.3
    %)Insurance Commissions
    
    
    3,430
    
    
    
    3,893
    
    
    
    (463
    )
    
    
    (11.9
    %)Remittance Fees
    
    
    1,579
    
    
    
    1,543
    
    
    
    36
    
    
    
    2.3
    %Trade Finance Fees
    
    
    1,517
    
    
    
    2,474
    
    
    
    (957
    )
    
    
    (38.7
    %)Other Service Charges and Fees
    
    
    1,439
    
    
    
    1,852
    
    
    
    (413
    )
    
    
    (22.3
    %)Net Gain on Sales of Loans
    
    
    866
    
    
    
    765
    
    
    
    101
    
    
    
    13.2
    %Bank-Owned Life Insurance Income
    
    
    695
    
    
    
    715
    
    
    
    (20
    )
    
    
    (2.8
    %)Gain on Sales of Investment Securities
    
    
    1,277
    
    
    
    618
    
    
    
    659
    
    
    
    106.6
    %Loss on Sales of Investment Securities
    
    
    (109
    )
    
    
    (483
    )
    
    
    374
    
    
    
    (77.4
    %)Other-Than-Temporary Impairment Loss on Investment Securities
    
    
    
    
    
    
    (2,410
    )
    
    
    2,410
    
    
    
    (100.0
    %)Other Operating Income (Loss)
    
    
    (462
    )
    
    
    1,874
    
    
    
    (2,336
    )
    
    
    (124.7
    %)Total Non-Interest Income
    
    $
    23,264
    
    
    $
    24,745
    
    
    $
    (1,481
    )
    
    
    (6.0
    %)
    39




---



##### Table of Contents



Financial Condition  Investment Portfolio
  Non-Interest Expense
 Three Months Ended September 30, 2009 vs. Three Months Ended September 30, 2008
  Three Months EndedSeptember 30,
    
    
    Increase (Decrease)2009
    
    
    2008
    
    
    Amount
    
    
    Percentage(Dollars in Thousands)Salaries and Employee Benefits
    
    $
    8,648
    
    
    $
    10,782
    
    
    $
    (2,134
    )
    
    
    (19.8
    %)Occupancy and Equipment
    
    
    2,834
    
    
    
    2,786
    
    
    
    48
    
    
    
    1.7
    %Deposit Insurance Premiums and Regulatory Assessments
    
    
    2,001
    
    
    
    780
    
    
    
    1,221
    
    
    
    156.5
    %Other Real Estate Owned Expense
    
    
    3,372
    
    
    
    2
    
    
    
    3,370
    
    
    
    N/MData Processing
    
    
    1,608
    
    
    
    1,498
    
    
    
    110
    
    
    
    7.3
    %Professional Fees
    
    
    1,239
    
    
    
    647
    
    
    
    592
    
    
    
    91.5
    %Supplies and Communications
    
    
    603
    
    
    
    681
    
    
    
    (78
    )
    
    
    (11.5
    %)Advertising and Promotion
    
    
    447
    
    
    
    914
    
    
    
    (467
    )
    
    
    (51.1
    %)Loan-Related Expense
    
    
    192
    
    
    
    170
    
    
    
    22
    
    
    
    12.9
    %Amortization of Other Intangible Assets
    
    
    379
    
    
    
    478
    
    
    
    (99
    )
    
    
    (20.7
    %)Other Operating Expenses
    
    
    2,366
    
    
    
    3,497
    
    
    
    (1,131
    )
    
    
    (32.3
    %)Total Non-Interest Expense
    
    $
    23,689
    
    
    $
    22,235
    
    
    $
    1,454
    
    
    
    6.5
    %
   40




---



##### Table of Contents



Nine Months Ended September 30, 2009 vs. Nine Months Ended September 30, 2008
  Nine Months EndedSeptember 30,
    
    
    Increase (Decrease)2009
    
    
    2008
    
    
    Amount
    
    
    Percentage(Dollars in Thousands)Salaries and Employee Benefits
    
    $
    24,659
    
    
    $
    33,363
    
    
    $
    (8,704
    )
    
    
    (26.1
    %)Occupancy and Equipment
    
    
    8,506
    
    
    
    8,360
    
    
    
    146
    
    
    
    1.7
    %Deposit Insurance Premiums and Regulatory Assessments
    
    
    7,420
    
    
    
    2,098
    
    
    
    5,322
    
    
    
    253.7
    %Other Real Estate Owned Expense
    
    
    5,017
    
    
    
    141
    
    
    
    4,876
    
    
    
    3,458.2
    %Data Processing
    
    
    4,691
    
    
    
    4,730
    
    
    
    (39
    )
    
    
    (0.8
    %)Professional Fees
    
    
    2,745
    
    
    
    2,627
    
    
    
    118
    
    
    
    4.5
    %Supplies and Communications
    
    
    1,772
    
    
    
    2,008
    
    
    
    (236
    )
    
    
    (11.8
    %)Advertising and Promotion
    
    
    1,640
    
    
    
    2,614
    
    
    
    (974
    )
    
    
    (37.3
    %)Loan-Related Expense
    
    
    1,590
    
    
    
    569
    
    
    
    1,021
    
    
    
    179.4
    %Amortization of Other Intangible Assets
    
    
    1,214
    
    
    
    1,504
    
    
    
    (290
    )
    
    
    (19.3
    %)Other Operating Expenses
    
    
    7,383
    
    
    
    7,859
    
    
    
    (476
    )
    
    
    (6.1
    %)Impairment Loss on Goodwill
    
    
    
    
    
    
    107,393
    
    
    
    (107,393
    )
    
    
    (100.0
    %)Total Non-Interest Expense
    
    $
    66,637
    
    
    $
    173,266
    
    
    $
    (106,629
    )
    
    
    (61.5
    %)
    41




---



##### Table of Contents



Provision (Benefit) for Income Taxes
    FINANCIAL CONDITION
 Investment Portfolio
  42




---



##### Table of Contents



September 30, 2009
    
    
    December 31, 2008Estimated
    
    
    Unrealized
    
    
    
    
    
    
    Estimated
    
    
    UnrealizedAmortized
    
    
    Fair
    
    
    Gain
    
    
    Amortized
    
    
    Fair
    
    
    GainCost
    
    
    Value
    
    
    (Loss)
    
    
    Cost
    
    
    Value
    
    
    (Loss)(In Thousands)Investment Securities Held to Maturity:Municipal Bonds
    
    $
    695
    
    
    $
    695
    
    
    $
    
    
    
    $
    695
    
    
    $
    695
    
    
    $
    Mortgage-Backed Securities (1)
    
    
    181
    
    
    
    181
    
    
    
    
    
    
    
    215
    
    
    
    215
    
    
    
    Total Investment Securities Held to Maturity
    
    $
    876
    
    
    $
    876
    
    
    $
    
    
    
    $
    910
    
    
    $
    910
    
    
    $
    Investment Securities Available for Sale:Mortgage-Backed Securities (1)
    
    $
    78,434
    
    
    $
    80,089
    
    
    $
    1,655
    
    
    $
    77,515
    
    
    $
    78,860
    
    
    $
    1,345Municipal Bonds
    
    
    55,511
    
    
    
    57,437
    
    
    
    1,926
    
    
    
    58,987
    
    
    
    58,313
    
    
    
    (674
    )U.S. Government Agency Securities
    
    
    38,317
    
    
    
    38,022
    
    
    
    (295
    )
    
    
    17,580
    
    
    
    17,700
    
    
    
    120Collateralized Mortgage Obligations (2)
    
    
    15,240
    
    
    
    15,576
    
    
    
    336
    
    
    
    36,204
    
    
    
    36,162
    
    
    
    (42
    )Asset-Backed Securities
    
    
    8,331
    
    
    
    8,417
    
    
    
    86
    
    
    
    
    
    
    
    
    
    
    
    Other Securities
    
    
    3,925
    
    
    
    4,172
    
    
    
    247
    
    
    
    3,925
    
    
    
    4,200
    
    
    
    275Equity Securities
    
    
    511
    
    
    
    873
    
    
    
    362
    
    
    
    511
    
    
    
    804
    
    
    
    293Corporate Bond (3)
    
    
    364
    
    
    
    439
    
    
    
    75
    
    
    
    355
    
    
    
    169
    
    
    
    (186
    )Total Investment Securities Available for Sale
    
    $
    200,633
    
    
    $
    205,025
    
    
    $
    4,392
    
    
    $
    195,077
    
    
    $
    196,208
    
    
    $
    1,131
 
 (1)
    
    Collateralized by residential mortgages and guaranteed by U.S. government sponsored
entities.(2)
    
    Collateralized by residential mortgages and guaranteed by U.S. government sponsored
entities, except for two private-label securities held as of December 31, 2008 with an
unrealized loss totaling $42,000. The two private-label securities were sold during the three
months ended March 31, 2009.(3)
    
    Balances presented for amortized cost, representing one corporate bond, were net of
an OTTI charge of $2.4 million, which was related to a credit loss, as of September 30, 2009
and December 31, 2008. Therefore, the adoption of a new accounting standard did not require a
reclassification for the non-credit portion of previously recognized OTTI from the opening
balance of retained earnings to other comprehensive income as of March 31, 2009.   Available for Sale
    
    
    Held to MaturityEstimated
    
    
    
    
    
    
    EstimatedAmortized
    
    
    Fair
    
    
    Amortized
    
    
    FairCost
    
    
    Value
    
    
    Cost
    
    
    Value(In Thousands)Within One Year
    
    $
    5,708
    
    
    $
    6,052
    
    
    $
    
    
    
    $
    Over One Year Through Five Years
    
    
    2,873
    
    
    
    3,009
    
    
    
    
    
    
    
    Over Five Years Through Ten Years
    
    
    31,330
    
    
    
    31,624
    
    
    
    695
    
    
    
    695Over Ten Years
    
    
    66,537
    
    
    
    67,802
    
    
    
    
    
    
    
    Mortgage-Backed Securities
    
    
    78,434
    
    
    
    80,089
    
    
    
    181
    
    
    
    181Collateralized Mortgage Obligations
    
    
    15,240
    
    
    
    15,576
    
    
    
    
    
    
    
    Equity Securities
    
    
    511
    
    
    
    873
    
    
    
    
    
    
    
    $
    200,633
    
    
    $
    205,025
    
    
    $
    876
    
    
    $
    876
 43




---



##### Table of Contents



Holding PeriodLess than 12 Months
    
    
    12 Months or More
    
    
    TotalGross
    
    
    Estimated
    
    
    Number
    
    
    Gross
    
    
    Estimated
    
    
    Number
    
    
    Gross
    
    
    Estimated
    
    
    NumberInvestment Securities
    
    Unrealized
    
    
    Fair
    
    
    of
    
    
    Unrealized
    
    
    Fair
    
    
    of
    
    
    Unrealized
    
    
    Fair
    
    
    ofAvailable for Sale
    
    Losses
    
    
    Value
    
    
    Securities
    
    
    Losses
    
    
    Value
    
    
    Securities
    
    
    Losses
    
    
    Value
    
    
    Securities(In Thousands)September 30, 2009:Mortgage-Backed Securities
    
    $
    30
    
    
    $
    10,183
    
    
    
    6
    
    
    $
    
    
    
    $
    
    
    
    
    
    
    
    $
    30
    
    
    $
    10,183
    
    
    
    6Municipal Bonds
    
    
    7
    
    
    
    1,960
    
    
    
    3
    
    
    
    66
    
    
    
    807
    
    
    
    1
    
    
    
    73
    
    
    
    2,767
    
    
    
    4U.S. Government Agency
Securities
    
    
    302
    
    
    
    34,685
    
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    302
    
    
    
    34,685
    
    
    
    6Collateralized Mortgage
Obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Asset-Backed Securities
    
    
    2
    
    
    
    5,463
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    5,463
    
    
    
    1Other Securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33
    
    
    
    967
    
    
    
    1
    
    
    
    33
    
    
    
    967
    
    
    
    1$
    341
    
    
    $
    52,291
    
    
    
    16
    
    
    $
    99
    
    
    $
    1,774
    
    
    
    2
    
    
    $
    440
    
    
    $
    54,065
    
    
    
    18December 31, 2008:Mortgage-Backed Securities
    
    $
    158
    
    
    $
    10,631
    
    
    
    42
    
    
    $
    33
    
    
    $
    5,277
    
    
    
    4
    
    
    $
    191
    
    
    $
    15,908
    
    
    
    46Municipal Bonds
    
    
    968
    
    
    
    35,614
    
    
    
    66
    
    
    
    119
    
    
    
    1,749
    
    
    
    4
    
    
    
    1,087
    
    
    
    37,363
    
    
    
    70Collateralized Mortgage
Obligations
    
    
    36
    
    
    
    4,569
    
    
    
    4
    
    
    
    143
    
    
    
    5,903
    
    
    
    4
    
    
    
    179
    
    
    
    10,472
    
    
    
    8Other Securities
    
    
    72
    
    
    
    929
    
    
    
    1
    
    
    
    40
    
    
    
    1,960
    
    
    
    2
    
    
    
    112
    
    
    
    2,889
    
    
    
    3Corporate Bonds
    
    
    186
    
    
    
    169
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    186
    
    
    
    169
    
    
    
    1$
    1,420
    
    
    $
    51,912
    
    
    
    114
    
    
    $
    335
    
    
    $
    14,889
    
    
    
    14
    
    
    $
    1,755
    
    
    $
    66,801
    
    
    
    128
   44




---



##### Table of Contents



Loan Portfolio
  September 30,
    
    
    December 31,
    
    
    Increase (Decrease)2009
    
    
    2008
    
    
    Amount
    
    
    Percentage(Dollars in Thousands)Real Estate Loans:Commercial Property
    
    $
    877,053
    
    
    $
    908,970
    
    
    $
    (31,917
    )
    
    
    (3.5
    %)Construction
    
    
    127,304
    
    
    
    178,783
    
    
    
    (51,479
    )
    
    
    (28.8
    %)Residential Property
    
    
    82,378
    
    
    
    92,361
    
    
    
    (9,983
    )
    
    
    (10.8
    %)Total Real Estate Loans
    
    
    1,086,735
    
    
    
    1,180,114
    
    
    
    (93,379
    )
    
    
    (7.9
    %)Commercial and Industrial Loans:Commercial Term Loans
    
    
    1,477,843
    
    
    
    1,611,449
    
    
    
    (133,606
    )
    
    
    (8.3
    %)SBA Loans (1)
    
    
    140,161
    
    
    
    178,399
    
    
    
    (38,238
    )
    
    
    (21.4
    %)Commercial Lines of Credit
    
    
    128,844
    
    
    
    214,699
    
    
    
    (85,855
    )
    
    
    (40.0
    %)International Loans
    
    
    77,194
    
    
    
    95,185
    
    
    
    (17,991
    )
    
    
    (18.9
    %)Total Commercial and Industrial Loans
    
    
    1,824,042
    
    
    
    2,099,732
    
    
    
    (275,690
    )
    
    
    (13.1
    %)Consumer Loans
    
    
    68,537
    
    
    
    83,525
    
    
    
    (14,988
    )
    
    
    (17.9
    %)Total Loans  Gross
    
    
    2,979,314
    
    
    
    3,363,371
    
    
    
    (384,057
    )
    
    
    (11.4
    %)Deferred Loan Fees
    
    
    (1,810
    )
    
    
    (1,260
    )
    
    
    (550
    )
    
    
    43.7
    %Allowance for Loan Losses
    
    
    (124,768
    )
    
    
    (70,986
    )
    
    
    (53,782
    )
    
    
    75.8
    %Net Loans Receivable
    
    $
    2,852,736
    
    
    $
    3,291,125
    
    
    $
    (438,389
    )
    
    
    (13.3
    %)
 
 (1)
    
    Includes loans held for sale, at the lower of cost or market, of $5.1 million
and $37.4 million as of September 30, 2009 and December 31, 2008, respectively.    Balance as of
    
    
    Percentage of TotalIndustry
    
    September 30, 2009
    
    
    Gross Loans Outstanding(In Thousands)Lessors of Non-Residential Buildings
    
    $
    428,063
    
    
    
    14.4
    %Accommodation/Hospitality
    
    $
    421,951
    
    
    
    14.2
    %Gasoline Stations
    
    $
    351,990
    
    
    
    11.8
    %
  45




---



##### Table of Contents



Non-Performing Assets
   September 30,
    
    
    December 31,
    
    
    Increase (Decrease)2009
    
    
    2008
    
    
    Amount
    
    
    Percentage(Dollars in Thousands)Non-Accrual Loans
    
    $
    174,363
    
    
    $
    120,823
    
    
    $
    53,540
    
    
    
    44.3
    %Loans 90 Days or More Past Due and Still Accruing
    
    
    64
    
    
    
    1,075
    
    
    
    (1,011
    )
    
    
    (94.0
    %)Total Non-Performing Loans
    
    
    174,427
    
    
    
    121,898
    
    
    
    52,529
    
    
    
    43.1
    %Other Real Estate Owned
    
    
    27,140
    
    
    
    823
    
    
    
    26,317
    
    
    
    3,197.7
    %Total Non-Performing Assets
    
    $
    201,567
    
    
    $
    122,721
    
    
    $
    78,846
    
    
    
    64.2
    %Troubled Debt Restructurings on Accrual Status
    
    $
    69,893
    
    
    $
    
    
    
    $
    69,893
    
    
    
    N/A
   
    
    A commercial property secured by five car washes around the Southern California region
had an outstanding balance of $24.0 million as of September 30, 2009. A fair value
analysis, based on a recent appraisal, of the collateral indicated a need of $3.4 million
specific reserve for that loan.
    
    A commercial property loan and line of credit secured by an apartment complex in Los
Angeles, California had an outstanding balance of $4.6 million as of September 30, 2009 and
was fully secured by real estate. A fair value analysis, based on a recent appraisal, of
the collateral indicated no specific reserve needed for that loan.
    
    A SBA loan secured by a hotel in Austin, Texas had an outstanding balance of $4.1
million as of September 30, 2009 and was fully secured by real estate. A fair value
analysis, based on a recent appraisal, of the collateral indicated a need of $67,000
specific reserve for that loan.
 46




---



##### Table of Contents



September 30,
    
    
    December 31,2009
    
    
    2008(In Thousands)Recorded Investment With Related Allowance
    
    $
    190,974
    
    
    $
    71,448Recorded Investment With No Related Allowance
    
    
    39,698
    
    
    
    49,945Allowance on Impaired Loans
    
    
    (36,672
    )
    
    
    (18,157
    )Net Recorded Investment in Impaired Loans
    
    $
    194,000
    
    
    $
    103,236
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(In Thousands)Interest Income That Would Have Been Recognized Had
Impaired Loans Performed in Accordance With Their Original Terms
    
    $
    5,473
    
    
    $
    3,716
    
    
    $
    12,126
    
    
    $
    8,148Less: Interest Income Recognized on Impaired Loans
    
    
    (3,987
    )
    
    
    (2,386
    )
    
    
    (7,591
    )
    
    
    (3,017
    )Interest Foregone on Impaired Loans
    
    $
    1,486
    
    
    $
    1,330
    
    
    $
    4,535
    
    
    $
    5,131
  47




---



##### Table of Contents



Allowance for Loan Losses and Allowance for Off-Balance Sheet Items
    48




---



##### Table of Contents



As of and for the
    
    
    As of and for theThree Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    June 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2009
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008(In Thousands)Allowance for Loan Losses:Balance at Beginning of Period
    
    $
    105,268
    
    
    $
    104,943
    
    
    $
    62,977
    
    
    $
    70,986
    
    
    $
    43,611Actual Charge-Offs
    
    
    (30,362
    )
    
    
    (24,332
    )
    
    
    (12,171
    )
    
    
    (67,210
    )
    
    
    (28,679
    )Recoveries on Loans Previously Charged Off
    
    
    487
    
    
    
    735
    
    
    
    340
    
    
    
    1,925
    
    
    
    1,331Net Loan Charge-Offs
    
    
    (29,875
    )
    
    
    (23,597
    )
    
    
    (11,831
    )
    
    
    (65,285
    )
    
    
    (27,348
    )Provision Charged to Operating Expenses
    
    
    49,375
    
    
    
    23,922
    
    
    
    12,802
    
    
    
    119,067
    
    
    
    47,685Balance at End of Period
    
    $
    124,768
    
    
    $
    105,268
    
    
    $
    63,948
    
    
    $
    124,768
    
    
    $
    63,948Allowance for Off-Balance Sheet Items:Balance at Beginning of Period
    
    $
    4,291
    
    
    $
    4,279
    
    
    $
    3,932
    
    
    $
    4,096
    
    
    $
    1,765Provision Charged to Operating Expenses
    
    
    125
    
    
    
    12
    
    
    
    374
    
    
    
    320
    
    
    
    2,541Balance at End of Period
    
    $
    4,416
    
    
    $
    4,291
    
    
    $
    4,306
    
    
    $
    4,416
    
    
    $
    4,306Ratios:Net Loan
Charge-Offs to Average Total Gross Loans (1)
    
    
    3.85
    %
    
    
    2.88
    %
    
    
    1.41
    %
    
    
    2.70
    %
    
    
    1.10
    %Net Loan Charge-Offs to Total Gross Loans (1)
    
    
    3.98
    %
    
    
    3.00
    %
    
    
    1.41
    %
    
    
    2.93
    %
    
    
    1.09
    %Allowance for Loan Losses to Average Total Gross Loans
    
    
    4.05
    %
    
    
    3.21
    %
    
    
    1.91
    %
    
    
    3.85
    %
    
    
    1.92
    %Allowance for Loan Losses to Total Gross Loans
    
    
    4.19
    %
    
    
    3.33
    %
    
    
    1.91
    %
    
    
    4.19
    %
    
    
    1.91
    %Net Loan Charge-Offs to Allowance for Loan Losses (1)
    
    
    95.00
    %
    
    
    89.91
    %
    
    
    73.60
    %
    
    
    69.96
    %
    
    
    57.13
    %Net Loan Charge-Offs to Provision Charged to Operating Expenses
    
    
    60.51
    %
    
    
    98.64
    %
    
    
    92.42
    %
    
    
    54.83
    %
    
    
    57.35
    %Allowance for Loan Losses to Non-Performing Loans
    
    
    71.53
    %
    
    
    62.92
    %
    
    
    57.16
    %
    
    
    71.53
    %
    
    
    57.16
    %Balances:Average Total Gross Loans Outstanding During Period
    
    $
    3,079,746
    
    
    $
    3,283,574
    
    
    $
    3,343,121
    
    
    $
    3,236,897
    
    
    $
    3,322,579Total Gross Loans Outstanding at End of Period
    
    $
    2,979,314
    
    
    $
    3,159,309
    
    
    $
    3,346,689
    
    
    $
    2,979,314
    
    
    $
    3,346,689Non-Performing Loans at End of Period
    
    $
    174,427
    
    
    $
    167,296
    
    
    $
    111,870
    
    
    $
    174,427
    
    
    $
    111,870
 
 (1)
    
    Net loan charge-offs are annualized to calculate the ratios. Provision for Credit Losses.
 49




---



##### Table of Contents



Deposits
  September 30,
    
    
    December 31,
    
    
    Increase (Decrease)2009
    
    
    2008
    
    
    Amount
    
    
    Percentage(Dollars in Thousands)Demand  Noninterest-Bearing
    
    $
    561,548
    
    
    $
    536,944
    
    
    $
    24,604
    
    
    
    4.6
    %Interest-Bearing:Savings
    
    
    98,019
    
    
    
    81,869
    
    
    
    16,150
    
    
    
    19.7
    %Money Market Checking and NOW Accounts
    
    
    723,585
    
    
    
    370,401
    
    
    
    353,184
    
    
    
    95.4
    %Time Deposits of $100,000 or More
    
    
    845,318
    
    
    
    849,800
    
    
    
    (4,482
    )
    
    
    (0.5
    %)Other Time Deposits
    
    
    763,390
    
    
    
    1,231,066
    
    
    
    (467,676
    )
    
    
    (38.0
    %)Total Deposits
    
    $
    2,991,860
    
    
    $
    3,070,080
    
    
    $
    (78,220
    )
    
    
    (2.5
    %)
  Interest Rate Risk Management  Liquidity  Hanmi Bank.
 50




---



##### Table of Contents



Federal Home Loan Bank Advances
  Junior Subordinated Debentures
  INTEREST RATE RISK MANAGEMENT
  51




---



##### Table of Contents



AfterThree
    
    
    After OneMonths
    
    
    Year ButWithin
    
    
    But
    
    
    Within
    
    
    After
    
    
    Non-Three
    
    
    Within
    
    
    Five
    
    
    Five
    
    
    Interest-Months
    
    
    One Year
    
    
    Years
    
    
    Years
    
    
    Sensitive
    
    
    Total(Dollars in Thousands)ASSETSCash and Due from Banks
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    57,727
    
    
    $
    57,727Interest-Bearing Deposits in Other Banks
    
    
    155,607
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    155,607Investment Securities:Fixed Rate
    
    
    1,176
    
    
    
    9,434
    
    
    
    15,986
    
    
    
    166,105
    
    
    
    
    
    
    
    192,701Floating Rate
    
    
    3,538
    
    
    
    9,515
    
    
    
    147
    
    
    
    
    
    
    
    
    
    
    
    13,200Loans:Fixed Rate
    
    
    61,474
    
    
    
    52,671
    
    
    
    733,389
    
    
    
    245,466
    
    
    
    
    
    
    
    1,093,000Floating Rate
    
    
    1,628,882
    
    
    
    14,022
    
    
    
    64,188
    
    
    
    4,859
    
    
    
    
    
    
    
    1,711,951Non-Accrual
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    174,363
    
    
    
    174,363Deferred Loan Fees and Allowance for Loan Losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (126,578
    )
    
    
    (126,578
    )Investment in Federal Home Loan Bank Stock and Investment in
Federal Reserve Bank Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,750
    
    
    
    
    
    
    
    40,750Other Assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32,830
    
    
    
    111,939
    
    
    
    144,769TOTAL ASSETS
    
    $
    1,850,677
    
    
    $
    85,642
    
    
    $
    813,710
    
    
    $
    490,010
    
    
    $
    217,451
    
    
    $
    3,457,490LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Deposits:Demand  Noninterest-Bearing
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    561,548
    
    
    $
    561,548Savings
    
    
    10,460
    
    
    
    38,843
    
    
    
    41,333
    
    
    
    7,383
    
    
    
    
    
    
    
    98,019Money Market Checking and NOW Accounts
    
    
    110,707
    
    
    
    210,488
    
    
    
    233,574
    
    
    
    168,816
    
    
    
    
    
    
    
    723,585Time Deposits:Fixed Rate
    
    
    648,533
    
    
    
    940,136
    
    
    
    19,972
    
    
    
    11
    
    
    
    
    
    
    
    1,608,652Floating Rate
    
    
    56
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    56Federal Home Loan Bank Advances
    
    
    152,420
    
    
    
    5,121
    
    
    
    3,287
    
    
    
    
    
    
    
    
    
    
    
    160,828Other Borrowings
    
    
    1,496
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,496Junior Subordinated Debentures
    
    
    82,406
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    82,406Other Liabilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,780
    
    
    
    33,780Stockholders Equity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    187,120
    
    
    
    187,120TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    1,006,078
    
    
    $
    1,194,588
    
    
    $
    298,166
    
    
    $
    176,210
    
    
    $
    782,448
    
    
    $
    3,457,490Repricing Gap
    
    $
    844,599
    
    
    $
    (1,108,946
    )
    
    $
    515,544
    
    
    $
    313,800
    
    
    $
    (564,997
    )
    
    $
    Cumulative Repricing Gap
    
    $
    844,599
    
    
    $
    (264,347
    )
    
    $
    251,197
    
    
    $
    564,997
    
    
    $
    
    
    
    $
    Cumulative Repricing Gap as a Percentage of Total Assets
    
    
    24.43
    %
    
    
    (7.65
    %)
    
    
    7.27
    %
    
    
    16.34
    %
    
    
    Cumulative Repricing Gap as a Percentage of
Interest-Earning Assets
    
    
    26.33
    %
    
    
    (8.24
    %)
    
    
    7.83
    %
    
    
    17.62
    %
    
    
    
   52




---



##### Table of Contents



Less Than Three Months
    
    Less Than Twelve MonthsSeptember 30,
    
    December 31,
    
    September 30,
    
    December 31,2009
    
    2008
    
    2009
    
    2008(Dollars in Thousands)Cumulative Repricing Gap
    
    $
    844,599
    
    
    $
    1,127,888
    
    
    $
    (264,347
    )
    
    $
    (145,945
    )Cumulative Repricing Gap as a Percentage of
Total Assets
    
    
    24.43
    %
    
    
    29.10
    %
    
    
    (7.65
    %)
    
    
    (3.77
    %)Cumulative Repricing Gap as a Percentage of
Interest-Earning Assets
    
    
    26.33
    %
    
    
    31.21
    %
    
    
    (8.24
    %)
    
    
    (4.04
    %)
   Rate Shock TablePercentage Changes
    
    Change in AmountChange in
    
    Net
    
    Economic
    
    Net
    
    EconomicInterest
    
    Interest
    
    Value of
    
    Interest
    
    Value ofRate
    
    Income
    
    Equity
    
    Income
    
    Equity(Dollars in Thousands)200%
    
    13.97%
    
    (27.89%)
    
    $18,305
    
    $(76,900)100%
    
    7.14%
    
    (14.21%)
    
    $9,359
    
    $(39,173)(100%)
    
    (1)
    
    (1)
    
    (1)
    
    (1)(200%)
    
    (1)
    
    (1)
    
    (1)
    
    (1)
 
 (1)
    
    The table above only reflects the impact of upward shocks due to the fact
that a downward parallel shock of 100 basis points or more is not possible given that
some short-term rates are currently less than one percent.  LIQUIDITY AND CAPITAL RESOURCES
 Capital Resources
  53




---



##### Table of Contents



Notes to Consolidated Financial
Statements (Unaudited), Note 9  Stockholders Equity
 Liquidity  Hanmi Financial
 Dividends Notes to Consolidated Financial Statements (Unaudited), Note 3  Regulatory
Matters,
 Regulatory Matters  Written
Agreement and Final Order
 Liquidity  Hanmi Bank
  54




---



##### Table of Contents



55




---



##### Table of Contents



Notes to Consolidated Financial Statements
(Unaudited), Note 13  Subsequent Events
 Capital Ratios
   Minimum
    
    Minimum to BeRegulatory
    
    Categorized asActual
    
    Requirement
    

Well-CapitalizedAmount
    
    Ratio
    
    Amount
    
    Ratio
    
    Amount
    
    Ratio(Dollars in Thousands)Total Capital (to Risk-Weighted Assets):Hanmi Financial
    
    $
    281,845
    
    
    
    9.15
    %
    
    $
    246,403
    
    
    
    8.00
    %
    
    
    N/A
    
    
    
    N/AHanmi Bank
    
    $
    297,942
    
    
    
    9.69
    %
    
    $
    246,071
    
    
    
    8.00
    %
    
    $
    307,589
    
    
    
    10.00
    %Tier 1 Capital (to Risk-Weighted Assets):Hanmi Financial
    
    $
    241,951
    
    
    
    7.86
    %
    
    $
    123,202
    
    
    
    4.00
    %
    
    
    N/A
    
    
    
    N/AHanmi Bank
    
    $
    258,262
    
    
    
    8.40
    %
    
    $
    123,035
    
    
    
    4.00
    %
    
    $
    184,553
    
    
    
    6.00
    %Tier 1 Leverage (to Average Total Assets):Hanmi Financial
    
    $
    241,951
    
    
    
    6.60
    %
    
    $
    146,608
    
    
    
    4.00
    %
    
    
    N/A
    
    
    
    N/AHanmi Bank
    
    $
    258,262
    
    
    
    7.05
    %
    
    $
    146,444
    
    
    
    4.00
    %
    
    $
    183,055
    
    
    
    5.00
    %
  Regulatory Matters
  56




---



##### Table of Contents



Memorandum of Understanding
     Written Agreement and Final Order
   57




---



##### Table of Contents



Ratio of Tangible ShareholdersDate
    
    Equity to Total Tangible AssetsBy December 31, 2009
    
    Not Less Than 7.0 PercentBy July 31, 2010
    
    Not Less Than 9.0 PercentFrom December 31, 2010 and Until the Order is Terminated
    
    Not Less Than 9.5 Percent
   Dividends
    58




---



##### Table of Contents



OFF-BALANCE SHEET ARRANGEMENTS
 Note 11  Off-Balance Sheet
Commitments Item 1.
Business  Off-Balance Sheet Commitments
 CONTRACTUAL OBLIGATIONS
  RECENTLY ISSUED ACCOUNTING STANDARDS
 FASB ASC 105, Generally Accepted Accounting Principles
 FASB ASC 810, Consolidations
 59




---



##### Table of Contents



FASB ASC 860, Transfers and Servicing
 FASB ASC 855, Subsequent Events
 
 ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Item 2. Managements
Discussion and Analysis of Financial Condition and Results of Operations  Interest Rate Risk
Management " Liquidity and Capital Resources.
 60




---



##### Table of Contents



ITEM 4.
    
    CONTROLS AND PROCEDURES
   Changes in Internal Control over Financial Reporting
  
    
    Immediate re-grading and down-grading of all modified loans;
    
    Expanded risk-based review to verify loan grades on high-risk identified segments of the
loan portfolio;
    
    Expanded loan review scope to include a larger sample of pass loans and watch list
loans;
    
    Third party review of the Banks allowance for loan loss methodology and qualitative
factors; and
    
    More active involvement and review by Controller and Chief Financial Officer.
  
 PART II  OTHER INFORMATION
 
 ITEM 1.
    
    LEGAL PROCEEDINGS
  61




---



##### Table of Contents



ITEM 1A.
    
    RISK FACTORS
 Our operations may require us to raise additional capital in the future, but that capital may
not be available or may not be on terms acceptable to us when it is needed.
 Ratio of Tangible
ShareholdersDate
    
    Equity to Total Tangible AssetsBy December 31, 2009
    
    Not Less Than 7.0 PercentBy July 31, 2010
    
    Not Less Than 9.0 PercentFrom December 31, 2010 and Until the Order is Terminated
    
    Not Less Than 9.5 Percent
    We may be unable to retain or replace brokered deposits as they mature.
 62




---



##### Table of Contents



Our proposed transaction to sell additional shares of common stock to LIS is subject to a
number of conditions, and the failure to complete this transaction could adversely affect our
financial condition, results of operations and prospects as a going concern.
  63




---



##### Table of Contents



Hanmi Bank is subject to additional regulatory oversight as a result of a formal regulatory
enforcement action issued by the Federal Reserve Bank of San Francisco and the California
Department of Financial Institutions. Notes to Consolidated Financial Statements
(Unaudited), Note 3  Regulatory Matters. Notes to Consolidated Financial Statements
(Unaudited), Note 13  Subsequent Events,
  We may become subject to additional regulatory restrictions in the event that our regulatory
capital levels continue to decline.
   64




---



##### Table of Contents



We may elect or be compelled to seek additional capital in the future, but capital may not be
available when it is needed.
  We may be restricted in paying deposit rates above a national rate, which may adversely affect
our ability to maintain and increase our deposit levels.
   
 ITEM 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3.
    
    DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5.
    
    OTHER INFORMATION
  65




---



##### Table of Contents



ITEM 6.
    
    EXHIBITS
 ExhibitNumber
    
    Document3.1
    
    
    Amended and Restated Certificate of Incorporation of Hanmi Financial Corporation (7)3.2
    
    
    Certificate of Second Amendment of Certificate of Incorporation of Hanmi Financial Corporation (7)3.3
    
    
    Amended and Restated Bylaws of Hanmi Financial Corporation (7)3.4
    
    
    Certificate of Amendment to Bylaws of Hanmi Financial Corporation (7)10.1
    
    
    Amended and Restated Trust Agreement of Hanmi Capital Trust I dated as of January 8, 2004 among Hanmi Financial
Corporation, Deutsche Bank Trust Company Americas, as Property Trustee, Deutsche Bank Trust Company Delaware, as
Delaware Trustee, and the Administrative Trustees Named Therein (2)10.2
    
    
    Hanmi Capital Trust I Junior Subordinated Indenture dated as of January 8, 2004 entered into between Hanmi Financial
Corporation and Deutsche Bank Trust Company Americas, as Trustee (included as exhibit D to Exhibit 10.1) (2)10.3
    
    
    Hanmi Capital Trust I Guarantee Agreement dated as of January 8, 2004 entered into between Hanmi Financial Corporation,
as Guarantor, and Deutsche Bank Trust Company Americas, as Guarantee Trustee (2)10.4
    
    
    Hanmi Capital Trust I Form of Common Securities Certificate (included as exhibit B to Exhibit 10.1) (2)10.5
    
    
    Hanmi Capital Trust I Form of Preferred Securities Certificate (included as exhibit C to Exhibit 10.1) (2)10.6
    
    
    Amended and Restated Trust Agreement of Hanmi Capital Trust II dated as of March 15, 2004 among Hanmi Financial
Corporation, Deutsche Bank Trust Company Americas, as Property Trustee, Deutsche Bank Trust Company Delaware, as
Delaware Trustee, and the Administrative Trustees Named Therein (2)10.7
    
    
    Hanmi Capital Trust II Junior Subordinated Indenture dated as of March 15, 2004 entered into between Hanmi Financial
Corporation and Deutsche Bank Trust Company Americas, as Trustee (included as exhibit D to Exhibit 10.6) (2)10.8
    
    
    Hanmi Capital Trust II Guarantee Agreement dated as of March 15, 2004 entered into between Hanmi Financial Corporation,
as Guarantor, and Deutsche Bank Trust Company Americas, as Guarantee Trustee (2)10.9
    
    
    Hanmi Capital Trust II Form of Common Securities Certificate (included as exhibit B to Exhibit 10.6) (2)10.10
    
    
    Hanmi Capital Trust II Form of Preferred Securities Certificate (included as exhibit C to Exhibit 10.6) (2)10.11
    
    
    Amended and Restated Trust Agreement of Hanmi Capital Trust III dated as of April 28, 2004 among Hanmi Financial
Corporation, Deutsche Bank Trust Company Americas, as Property Trustee, Deutsche Bank Trust Company Delaware, as
Delaware Trustee, and the Administrative Trustees Named Therein (2)10.12
    
    
    Hanmi Capital Trust III Junior Subordinated Indenture dated as of April 28, 2004 entered into between Hanmi Financial
Corporation and Deutsche Bank Trust Company Americas, as Trustee (included as exhibit D to Exhibit 10.11)
(2)10.13
    
    
    Hanmi Capital Trust III Guarantee Agreement dated as of April 28, 2004 entered into between Hanmi Financial Corporation,
as Guarantor, and Deutsche Bank Trust Company Americas, as Guarantee Trustee (2)10.14
    
    
    Hanmi Capital Trust III Form of Common Securities Certificate (included as exhibit B to Exhibit 10.11) (2)10.15
    
    
    Hanmi Capital Trust III Form of Preferred Securities Certificate (included as exhibit C to Exhibit 10.11) (2)10.16
    
    
    Employment Agreement Between Hanmi Financial Corporation and Hanmi Bank, on the One Hand, and Jay S. Yoo, on the Other
Hand, dated as of June 19, 2008 (3)10.17
    
    
    Hanmi Financial Corporation 2007 Equity Compensation Plan (1)10.18
    
    
    Hanmi Financial Corporation Year 2000 Stock Option Plan (6)10.19
    
    
    Form of Notice of Stock Option Grant and Agreement Pursuant to 2007 Equity Compensation Plan (7)10.20
    
    
    Form of Notice of Grant and Restricted Stock Agreement Pursuant to 2007 Equity Compensation Plan (7)10.21
    
    
    Employment Offer Letter with Brian E. Cho, executed November 1, 2007 (5)10.22
    
    
    Securities Purchase Agreement, dated June 12, 2009, by and between Hanmi Financial Corporation and Leading Investments &
Securities Co., Ltd. (8)10.23
    
    
    Registration Rights Agreement, dated June 12, 2009, by and between Hanmi Financial Corporation and Leading Investments &
Securities Co., Ltd. (8)10.24
    
    
    First Amendment to the Securities Purchase Agreement, dated July 31, 2009, by and between Hanmi Financial Corporation
and Leading Investment & Securities Co., Ltd. (9)10.25
    
    
    Amended and Restated Term Sheet, dated September 14, 2009, by and among Hanmi Financial Corporation, Leading Investment
& Securities Co., Ltd., and IWL Partners LLC (10)
 66




---



##### Table of Contents



ITEM 6.
    
    EXHIBITS(Continued)
 ExhibitNumber
    
    Document10.26
    
    
    Second Amendment to the Securities Purchase Agreement, dated September 28, 2009, by and between Hanmi Financial Corporation and
Leading Investment & Securities Co., Ltd. (11)10.27
    
    
    First Amendment to the Amended and Restated Term Sheet, dated September 28, 2009, by and between Hanmi Financial Corporation,
Leading Investment & Securities Co., Ltd., and IWL Partners, LLC (11)10.28
    
    
    Final Order, dated November 2, 2009, issued to Hanmi Bank by the California Department of Financial Institutions (12)10.29
    
    
    Written Agreement, dated November 2, 2009, by and between Hanmi Financial Corporation and Hanmi Bank, on one hand, and the
Federal Reserve Bank of San Francisco, on the other hand (12)14
    
    
    Code of Ethics (4)21
    
    
    Subsidiaries of the Registrant (5)31.1
    
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as
amended31.2
    
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as
amended32.1
    
    
    Certification of Chief Executive Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 200232.2
    
    
    Certification of Chief Financial Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
 
 (1)
    
    Previously filed and incorporated by reference herein from Hanmi Financials Current
Report on Form 8-K filed with the SEC on June 26, 2007.(2)
    
    Previously filed and incorporated by reference herein from Hanmi Financials
Quarterly Report on Form 10-Q for the quarter ended June 30, 2004 filed with the SEC on August
9, 2004.(3)
    
    Previously filed and incorporated by reference herein from Hanmi Financials
Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 filed with the SEC on August
11, 2008.(4)
    
    Previously filed and incorporated by reference herein from Hanmi Financials Annual
Report on Form 10-K for the year ended December 31, 2004 filed with the SEC on March 16, 2005.(5)
    
    Previously filed and incorporated by reference herein from Hanmi Financials Annual
Report on Form 10-K for the year ended December 31, 2007 filed with the SEC on February 29,
2008.(6)
    
    Previously filed and incorporated by reference herein from Hanmi Financials
Registration Statement on Form S-8 filed with the SEC on August 18, 2000.(7)
    
    Previously filed and incorporated by reference herein from Hanmi Financials Annual
Report on Form 10-K for the year ended December 31, 2008 filed with the SEC on March 13, 2009.(8)
    
    Previously filed and incorporated by reference herein from Hanmi Financials Current
Report on Form 8-K filed with the SEC on June 15, 2009.(9)
    
    Previously filed and incorporated by reference herein from Hanmi Financials Current
Report on Form 8-K filed with the SEC on August 3, 2009.(10)
    
    Previously filed and incorporated by reference herein from Hanmi Financials
Current Report on Form 8-K filed with the SEC on September 14, 2009.(11)
    
    Previously filed and incorporated by reference herein from Hanmi Financials
Current Report on Form 8-K filed with the SEC on October 2, 2009.(12)
    
    Previously filed and incorporated by reference herein from Hanmi Financials
Current Report on Form 8-K filed with the SEC on November 5, 2009. 67




---



##### Table of Contents



SIGNATURES
  HANMI FINANCIAL CORPORATIONDate: November 9, 2009
    By:
    /s/ Jay S. YooJay S. YooPresident and Chief Executive OfficerBy:
    /s/ Brian E. ChoBrian E. ChoExecutive Vice President and Chief Financial Officer 68